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ORTHODOX  SOCIALISM 


A   CRITICISM 


BY 
JAMES  EDWAKD  LE  BOSSIGNOL,  PH.D. 

PROFESSOR  OF  ECONOMICS  IN  THE  UNIVERSITY  OF 

DENVER,  AUTHOR  OF  "MONOPOLIES  PAST 

AND  PRESENT" 


(  UNIVERSITY   ) 


NEW  YORK 

THOMAS  Y.   CKOWELL  &  CO. 
PUBLISHERS 


COPYRIGHT,  1907, 
THOMAS  Y.  CEOWELL  &  CO. 

PUBLISHED,  MAEOH,  1907. 


TO 

MY  FATHER  AND  FRIEND 
JAMES  HENDERSON 


164110 


PREFACE 

THE  following  pages  contain  a  brief  exposition 
and  criticism  of  the  essential  points  of  Marxian 
Socialism,  also  called  Scientific  Socialism.  That 
the  fundamental  theories  of  Socialism  are  by  no 
means  scientific  has  often  been  shown,  yet  many 
intelligent  people  are  not  aware  of  the  fact.  For 
this  reason  I  have  endeavored  to  present  a  critical 
examination  of  socialistic  theory  in  a  form  not 
objectionable  to  the  professional  economist  and 
yet  intelligible  to  such  of  the  laity  as  are  inter- 
ested in  social  problems,  and  entitled  to  form 
opinions  of  their  own  with  regard  to  all  important 
public  questions. 

It  has  frequently  been  said  that  the  socialist 
movement  represents  a  protest  against  the  in- 
equality of  economic  conditions  rather  than  a 
conviction  of  the  truth  of  socialistic  theory. 
While  there  is  some  reason  for  a  statement  like 
this,  it  cannot  be  doubted  that  error  can  lead 
astray,  and  that  a  widespread  knowledge  of  truth 
is  necessary  to  guide  the  discontent  and  indigna- 
tion of  mankind  in  the  direction  of  reasonable  and 
practicable  social  betterment.  The  theories  of 


VI  PREFACE 

Socialism,  if  they  are  to  do  this,  are  sadly  in  need 
of  radical  revision.  As  they  stand  now,  Socialism 
is  more  Utopian  than  scientific,  and  calculated  to 
divert  society  from  its  efforts  to  secure  a  gradual 
improvement  of  present  conditions  to  the  danger- 
ous pursuit  of  an  intangible  and  impracticable 
ideal. 

I  wish  to  thank  my  friends,  Chancellor  H.  A. 
Buchtel  of  Denver  and  D.  J.  L.  Day  of  Mon- 
treal, for  their  kind  criticism  and  their  help  in 
preparing  the  manuscript  for  the  press. 

J.  E.  LE  ROSSIGNOL. 
UNIVERSITY  PARK,  COLORADO. 


CONTENTS 

OHAPTEE  PAGK 

I.    THE  CREED  OF  SOCIALISM       ....  1 

II.    THE  LABOR-COST  THEORY  OF  VALUE     .        .  13 

III.  THE  IRON  LAW  OF  WAGES      ....  24 

IV.  SURPLUS  VALUE 32 

V.    MACHINERY 45 

VI.    INDUSTRIAL  CRISES 61 

VII.    THE  ECONOMIC  INTERPRETATION  OF  HISTORY  80 

VIII.    THE  CLASS  STRUGGLE 95 

IX.    THE  SOCIAL  REVOLUTION         ....  119 

SELECTED  LIST  OF  BOOKS  IN  ENGLISH       .        .        .  141 

INDEX     ...  145 


vii 


UNIVERSITY 

CALJFW 


CHAPTER  I 

THE  CREED  OF  SOCIALISM 

LIKE  every  manifestation  of  human  life  and  char- 
acter, Socialism  is  new  in  form,  but  old  in  spirit. 
Envy  and  pity  are  as  old  as  happiness  and  misery, 
and  out  of  such  a  soil  in  every  age  has  sprung  a 
vigorous  growth  of  reform  and  revolution.  The 
inequality  of  man  is  the  most  striking  fact  in  human 
history.  Always  have  there  been  strong  and  weak, 
master  and  servant,  rich  and  poor,  according  to 
the  law  of  the  eternal  struggle :  — 

"  That  they  should  take  who  have  the  power, 
And  they  should  keep  who  can." 

Opposed  to  the  fact  of  inequality  and  aristocracy 
is  the  idea  of  equality  and  brotherhood,  largely 
derived  from  Christianity.  Creatures  of  one  God, 
children  of  a  common  ancestor,  similar  hi  form  and 
feature,  intellect  and  appetite,  why  should  not  the 
sons  of  men  live  together  as  members  of  a  single, 
harmonious  family  ?  Why  should  the  good  things 
of  life  belong  to  a  few,  and  the  miseries  of  existence 
to  all  the  rest  ? 

"  When  Adam  delved  and  Eve  span, 
Who  was  then  a  gentleman  ?  " 
1 


2  ORTHODOX    SOCIALISM 

Out  of  a  strong  desire  for  better  things  has  come 
the  belief  that  better  things  are  possible.  Man  is 
hopelessly  optimistic.  What  he  wants  he  thinks 
he  can  get.  The  poor  of  this  world,  always  rich 
in  faith,  have  conceived  the  thought  of  a  perfect 
distribution  of  wealth,  and  the  desire  of  their  heart 
they  believe  they  will  one  day  attain.  This  desire 
and  this  faith  is  the  spirit  of  Socialism. 

There  are  at  least  three  kinds  of  socialists :  the 
naive,  the  Utopian,  and  the  scientific.  The  naive 
socialist,  not  knowing  that  he  is  a  socialist,  under- 
estimating the  strength  of  the  propertied  classes, 
appeals  to  the  crude  and  primitive  arbitrage  of 
force,  puts  his  confidence  in  bullets,  bayonets, 
and  barricades;  and  in  him  is  fulfilled  the  signifi- 
cant prophecy,  "They  that  take  the  sword  shall 
perish  with  the  sword."  The  'narrow-minded, 
short-sighted  rebel  dies  before  his  time,  while  his 
misguided  followers,  heartsick  with  hope  deferred, 
cry  out  hi  bitterness  of  soul,  "0  Lord,  how  long?" 

The  Utopian  socialist,  with  his  little  book,  his 
Plato,  More,  or  Bellamy,  comes  to  comfort  the  dis- 
tressed with  a  glowing  picture  of  a  golden  age, 
a  heaven  on  earth,  a  New  Jerusalem  of  peace  and 
prosperity,  where  the  hungry  shall  eat,  the  thirsty 
shall  drink,  and  all  tears  shall  be  wiped  away. 
How  alluring  this  scheme  of  perfect  harmony, 
how  just  the  method  of  distribution,  how  attrac- 
tive to  the  imagination,  how  comforting  to  the  soul, 


THE    CREED    OF    SOCIALISM  3 

and  yet  how  visionary,  intangible,  impossible,  a 
city  of  dreams,  a  mirage  of  the  desert ! 

The  scientific  socialist  is  the  only  socialist  worthy 
of  the  name.  The  dialectics  of  Hegel,  the  economics 
of  Ricardo,  and  the  biology  of  Darwin  combine  in 
him  to  produce  a  theory  of  Socialism  the  most 
remarkable  that  the  world  has  seen. 

Heinrich  Karl  Marx  (1818-1883),  by  birth  a 
Jew,  is  the  Moses  of  Socialism,  its  leader,  lawgiver, 
and  prophet.  His  great  book,  "Capital,"  is  often 
called  "the  Bible  of  the  working-class."  In  it 
are  expounded  the  economic  principles  of  scien- 
tific Socialism,  which  are  thought  to  give  a  clear 
insight  into  the  industrial  system  of  the  present 
time,  and  a  knowledge  of  the  tendencies  of  social 
life  and  growth  sufficient  to  justify  the  assertion 
that  the  social  revolution  is  at  hand,  and  the  eco- 
nomic "millennium"  about  to  be  ushered  in. 

The  scientific  socialist  of  the  orthodox  type  is 
very  sure  of  his  ground.  The  present  has  no 
mysteries  for  him ;  the  future  is  like  an  open  book. 
To  him  all  the  world  is  divided  into  three  classes: 
knaves,  fools,  and  socialists.  If  you  do  not  know 
Marx,  you  are  a  fool.  If  you  know,  and  do  not  be- 
lieve, you  are  a  knave,  or,  at  best,  a  parasite.  If 
you  know  and  believe,  you  are  a  socialist,  one  of 
the  elect.  Yet  nobody  should  be  offended  when 
such  epithets  are  used  in  the  course  of  a  scientific 
discussion,  for  it  is  quite  legitimate  to  call  men 


4  ORTHODOX  SOCIALISM 

parasites,  exploiters,  robbers,  and  the  like,  so  long 
as  it  is  done  in  a  scientific  spirit,  which,  as  Marx 
puts  it,  "  deals  with  individuals  only  in  so  far  as 
they  are  personifications  of  economic  categories, 
embodiments  of  particular  class  interests  and  class 
relations." 

But  of  late  years  a  sort  of  "  higher  criticism  " 
has  launched  its  attacks  upon  the  strongholds  of 
orthodox  Socialism.  Because  of  recent  economic 
investigation,  doubt  has  arisen  concerning  Marxian 
doctrines  formerly  considered  fundamental.  For 
such  opinions  some  have  been  cast  out  of  the 
synagogue,  while  others,  incurring  suspicion  of 
heresy,  have  lost  influence  with  their  more  ortho- 
dox comrades,  who  demand  rigid  adherence  to  es- 
sential principles.  "  Better  a  declared  enemy," 
they  say,  "than  a  half-hearted  friend."  "Die 
Ganzen  fiirchten  wir  nicht,  sondern  die  Halben." 

The  enlightened  socialist,  unable  to  deny  the 
validity  of  the  newer  criticism,  is  careful  to  distin- 
guish between  the  essentials  and  the  non-essentials 
of  Marxian  doctrine.  If  Marx  be  shown  to  have 
made  a  mistake,  he  will  say  that  the  point  is  not 
essential,  and  will  establish  himself  upon  the  foun- 
dation-stones of  the  Marxian  system,  which,  he 
thinks,  can  never  be  overthrown.  But  if  it  were 
proved  beyond  a  doubt  that  the  whole  teaching  of 
Marx  is  fallacious,  both  in  premises  and  conclu- 
sion, the  confirmed  socialist  would,  if  necessary, 


THE   CREED   OF  SOCIALISM  5 

abandon  his  great  teacher,  saying,  in  effect,  "  Let 
Socialism  be  true  and  every  man  a  liar."  And  if 
it  could  by  any  possibility  be  shown  that  Socialism, 
as  a  system  of  thought,  is  utterly  untenable,  the 
true  socialist  would  retreat  to  his  last  stronghold, 
and  say  that  Socialism,  in  the  last  analysis,  is  not 
a  system  of  thought,  but  a  process  of  social  evolu- 
tion, a  law  of  the  industrial  world  irresistibly  mov- 
ing on  toward  its  final  destiny. 

To  say  this  is  to  substitute  assertion  for  proof, 
feeling  for  reason,  faith  for  knowledge,  Utopian 
conjecture  for  scientific  demonstration.  It  may 
be  that  feeling  lies  deeper  than  reason,  that  faith 
is  more  reliable  than  science,  that  we  should  be- 
lieve in  order  that  we  may  know,  but  the  Marxian 
socialist  does  not  consciously  entertain  such  views 
as  these,  and  will  not  uphold  them  except  as  a 
last  resort.  If  Socialism  is  a  science,  how  is  it  that 
socialists  display  so  little  of  that  openness  of  mind, 
that  love  for  truth,  that  indifference  to  contradic- 
tion, that  sublime  patience  so  characteristic  of  the 
true  scientific  spirit? 

In  fact,  Socialismjs  not  a  science  at  all,  but  a 
faith^jTeligion.  Science  for  the  socialist  is  a  mere 
tool,  a  means  to  an  end,  to  be  discarded  when  it 
has  served  its  purpose.  For  him  science  is  once 
more  reduced  to  the  degrading  post  of  handmaid 
to  religion.  In  these  days,  when  we  have  a  psychol- 
ogy without  a  soul,  let  it  not  be  thought  strange 


6  ORTHODOX  SOCIALISM 

that  we  have  a  religion  without  a  god.  Like  most 
religions,  Socialism  has  its  prophet  and  its  book. 
The  prophet  is  Karl  Marx;  the  book  is  "Capital." 
Like  all  religions  it  has  its  creed,  which  the  ortho- 
dox hold  with  the  utmost  dogmatism  and  intol- 
erance. The  twin  passions  of  love  and  hate  supply 
the  motive  power,  and  a  firm  conviction  that  the 
social  revolution  is  at  hand  is  a  source  of  great 
enthusiasm  in  the  propaganda  for  the  conversion 
of  the  world. 

Socialists  are  optimistic  to  the  last  degree.  Un- 
bounded is  their  faith  in  man ;  brilliant  the  destiny 
they  predict  for  him.  The  socialist  is  essentially 
a  prophet.  Believing  himself  able  to  read  the  signs 
of  the  times,  he  does  not  fear  to  say  that  he  can 
with  certainty  foresee  in  outline,  at  least,  the 
changes  that  will  take  place  in  time  to  come. 
His  prophecy,  as  he  says,  is  not  Utopian,  like  that 
of  Plato,  More,  Owen,  and  Saint-Simon,  who  were 
not  able  to  give  a  reason  for  the  hopes  they  enter- 
tained; but  scientific,  like  the  clear  forecasts  of 
the  weather  bureau  or  the  logical  demonstrations 
of  Marx,  Engels,  Lassalle,  Bebel,  Liebknecht, 
Kautsky,  and  the  rest,  who  are  able  to  prove  all 
things,  even  those  that  lie  in  the  dim  vistas  of  the 
future.  Scientific  prophecy,  that  is  Socialism. 

The  International  Socialist  Congress,  which  met 
in  Amsterdam  in  August,  1904,  adopted  the  fol- 
lowing resolution:  "The  Congress  declares  that 


THE   CREED   OF  SOCIALISM  1 

in  order  that  the  working-class  may  develop  its 
full  strength  in  the  struggle  against  capitalism, 
it  is  necessary  that  there  should  be  but  one  social- 
ist party  in  each  country  as  against  the  parties  of 
the  capitalists,  just  as  there  is  but  one  proletariat 
in  each  country.  For  these  reasons  it  is  the  im- 
perative duty  of  all  comrades  and  all  socialist 
organizations  to  strive  to  the  utmost  of  their  power 
to  bring  about  this  unity  of  the  party,  on  the  prin- 
ciples established  by  the  international  congresses, 
that  unity  which  is  necessary  in  the  interests  of 
the  proletariat  to  which  they  are  responsible  for 
the  disastrous  consequences  of  divisions  in  their 
ranks." 

In  these  days  of  independent  thought  it  is  com- 
mon to  speak  slightingly  of  creeds,  but  when  men 
unite  for  religious,  moral,  political,  or  economic 
ends,  they  find  that  success  cannot  be  attained 
without  a  certain  degree  of  union  in  thought  and 
feeling.  In  the  words  of  the  prophet,  "Can  two 
walk  together  except  they  be  agreed?" 

In  early  times,  when  philosophers  like  Plato, 
More,  and  Campanella  saw  visions  of  ideal  Utopias, 
but  never  strove  to  realize  their  dreams, the  question 
of  uniformity  in  belief  was  of  no  consequence  to 
themselves  nor  to  the  world  at  large.  When  more 
practical  socialists,  like  Owen,  Saint-Simon,  and 
Fourier,  began  to  establish  their  experimental 
communities  —  "duodecimo  editions  of  the  New 


8  ORTHODOX  SOCIALISM 

Jerusalem,"  as  Marx  called  them — unity  in  faith 
was  seen  to  be  a  matter  of  vital  importance.  As- 
sociations of  philosophers,  like  the  Brook  Farm 
Community,  speedily  failed,  while  communities 
of  simple-minded  believers,  like  the  Shakers, 
continued  to  exist  until  the  present  day. 

But  when,  in  the  revolutionary  agitation  of 
1848,  socialists  of  all  countries  and  every  sect  began 
to  be  conscious  of  a  common  purpose,  the  time  was 
ripe  for  the  formulation  of  a  creed  that  should  unite 
the  revolutionary  forces  throughout  the  world. 
The  hour  was  come,  and  the  man.  The  man  was 
Karl  Marx,  who,  with  his  friend,  Frederick  Engels, 
drew  up  in  London,  in  January,  1848,  the  "Mani- 
festo of  the  Communist  Party/'  the  first  formal 
utterance  of  the  creed  and  program  of  scientific 
Socialism. 

For  some  years  thereafter  the  international 
faith  was  but  slowly  propagated ;  but  after  the  pub- 
lication, in  1867,  of  the  first  volume  of  "Capital," 
and  in  consequence  of  the  political  and  economic 
development  of  Germany  after  the  war  of  1870, 
the  views  of  Marx  spread  with  great  rapidity. 
At  the  present  time  there  are  over  3,000,000  so- 
cialist voters  in  Germany,  and  more  than  6,000,000 
in  the  world,  of  whom  by  far  the  greater  part  are 
enrolled  under  the  banner  of  Marxian  Socialism. 

Orthodox  socialists  throughout  the  world,  with 
all  the  variations  in  belief  due  to  nationality,  local 


THE   CREED    OF  SOCIALISM  9 

environment,  temperament,  or  other  causes,  hold 
more  or  less  strongly  to  the  following  doctrines, 
which  may  be  briefly  expressed  in  a  series  of  propo-      \ 
sitions :  —  \ 

1.  The  exchange  value  of  commodities  depends 
upon  the  amount  of  socially  necessary  labor-time 
required  to  produce  them.    This  is  the  Marxian 
theory  of  value. 

2.  Although    the   working   people,    the    prole- 
tariat, produce  everything,  their  wages  tend  to 
equal  the  bare  cost  of  living.    This  is  the  iron 
law  of  wages. 

3.  The   capitalists,    the   bourgeoisie,    take   the 
greater  part  of  the  values  created  by  the  prole- 
tariat in  the  form  of  rent,  interest,  and  profits. 
This  is  surplus  value,  obtained  by  exploitation  or 
robbery. 

4.  The  introduction  of  labor-saving  machinery 
and  improved  methods  of  production  creates  a 
vast  army  of  the  unemployed  and  impoverishes 
the    whole    working-class,    while    the    capitalists 
acquire  a  mass  of  commodities  which  they  can 
neither  use  nor  consume.    The  result  is  chronic 
over-production  and  under-consumption,  and  pe- 
riodical crises,  which  threaten  the  very  existence 
of  the  capitalistic  system. 

5.  The  desire  for  the  necessaries  and  luxuries 
of  life  has  generally  been  the  controlling  motive 
in  the  history  of  individuals  and  of  society.     Under 


10  ORTHODOX  SOCIALISM 

the  influence  of  economic  motives,  and  by  the 
incessant  struggle  of  opposing  classes  for  the  good 
things  of  life,  society  has  evolved  through  the 
successive  stages  of  slavery,  feudalism,  and  capital- 
ism. This  is  the  economic  interpretation  of  his- 
tory and  the  doctrine  of  the  class  struggle. 

6.  Capital  is  being  concentrated  into  the  hands 
of  a  few  magnates,  and  the  middle  class  is  being 
rapidly  eliminated.    Soon  there  will  be  only  two 
classes  left:    capitalists  and  laborers,  bourgeoisie 
and    proletariat,    the    robbers    and    the    robbed. 
But  the  proletariat  will  be  the  more  numerous 
class,  as  they  are  now;    therefore,  becoming  con- 
scious of  their  strength,  they  will  seize  the  political 
power  and  inaugurate  the  social  revolution. 

7.  When  the  proletariat  have  taken  the  political 
power,    they  will   gradually   or   speedily   abolish 
capitalism  by  organizing  industry  on  the  basis 
of  a  common  ownership  and  management  of  the 
means  of  production,  with  an  equitable  distribu- 
tion of  the  product,  so  as  to  abolish  poverty  and 
all  the  other  evils  of  capitalism. 

8.  After  the  establishment  of  Socialism,  human 
character  will  adapt  itself  to  the  ideal  environ- 
ment;  all  men,  or  nearly  all,  will  be  industrious 
and  virtuous,  and  an  era  of  peace,  prosperity,  and 
happiness  will  prevail  until  the  end  of  time. 

9.  The  social  revolution  is  coming  and  nothing 
can  prevent  it. 


THE   CREED   OF  SOCIALISM  11 

The  " higher  critics"  of  Socialism,  among  whom 
are  Bernstein  of  Germany  and  Jaurds  of  France, 
by  no  means  accept  the  orthodox  creed  in  its 
entirety,  but  reject  certain  doctrines  and  mollify 
others,  until  there  is  little  difference  between  them 
and  the  unbelieving  reformer  or  the  unconverted 
professor  of  political  economy. 

For  example,  these  enlightened  socialists  are 
well  aware  that  the  labor-cost  theory  of  value  is 
utterly  untenable.  /They  know  that  the  condition 
of  the  working  people  in  all  capitalistic  countries 
is  steadily,  though  slowly,  improving.  They 
recognize  the  fact  that  some,  at  least,  of  the  bour- 
geoisie perform  services  to  society,  and  thus  earn 
their  daily  bread,  if  not  all  the  luxuries  which  they 
enjoy.  They  are  disposed  to  admit  that  men  and 
women  are  at  times  actuated  by  other  than  eco- 
nomic motives.  They  suspect  the  accuracy  of 
the  orthodox  theory  of  industrial  crises,  and  con- 
cede the  possibility  that  their  frequency  may  be 
diminished,  and  their  worst  effects  prevented, 
by  a  better  organization  of  the  capitalistic  system. 
They  are  inclined  to  think  that  socialists  might 
safely  cooperate  with  unconverted  reformers  for 
the  sake  of  securing  the  half-loaf  of  partial  im- 
provement in  economic  conditions.  They  some- 
times admit  that  the  social  revolution  may  not 
come  as  a  sudden  cataclysm,  but  by  a  gradual 
and  almost  imperceptible  process  of  industrial 


12  ORTHODOX  SOCIALISM 

evolution.  Finally,  they  are  disposed  to  appeal  to 
the  altruistic  and  idealistic  side  of  human  nature, 
and  not  altogether  to  the  cold  decisions  of  pure 
reason  and  the  inexorable  logic  of  scientific 
demonstration. 

But  these  advanced  socialists,  heretical  as  they 
are,  still  claim  to  belong  to  the  true  fold,  still  hold 
to  what  they  consider  to  be  the  essentials  of  Social- 
ism, and,  with  possibly  a  little  mental  reserva- 
tion, could  honestly  repeat  a  formula  such  as  this : 
"I  believe  in  economic  evolution  and  the  class 
struggle.  I  recognize  exploitation  as  the  essen- 
tial evil  of  capitalism.  I  believe  in  the  proletariat. 
I  look  for  the  social  revolution,  the  regeneration 
of  man,  and  the  peace  and  prosperity  of  demo- 
cratic collectivism." 


CHAPTER  II 

THE  LABOR-COST  THEORY  OF  VALUE 

KARL  MARX  was  a  man  of  original  genius,  who, 
one  would  think,  might  have  worked  out  a  theory 
of  value  of  his  own.  That  he  did  not  do  so  is  no 
evidence  of  sloth,  for  he  was  a  most  industrious 
worker.  Nor  can  it  be  thought  to  indicate  re- 
spect for  the  bourgeois  economists,  whom  he 
despised.  It  must,  therefore,  be  due  to  the  fact 
that  no  man,  however  great,  can  rise  far  above 
the  environment  and  atmosphere  hi  which  he  lives. 
The  intellectual  environment  of  Marx  was  domi- 
nated by  the  English  classical  economists,  of  whom 
Ricardo  was  chief,  and  it  was  from  Ricardo  that 
he  derived  the  labor-cost  theory  of  value.  Ricardo 
says,  "  Commodities  exchange  in  the  ratio  of 
their  respective  costs  in  terms  of  labor;"  and 
Marx  expresses  the  same  idea  in  slightly  different 
words,  when  he  says,  "Commodities  in  which 
equal  quantities  of  labor  are  embodied,  or  which 
can  be  produced  in  the  same  tune,  have  the  same 
value." 

The  problem  is,  to  explain  why  commodities 
exchange,  as  they  do,  in  certain  ratios;  why  two 

yards  of  cotton  exchange  for  two  bushels  of  wheat, 

13 


14  ORTHODOX  SOCIALISM 

one  hat  for  one  ounce  of  silver.  Exchange  value 
is  ratio  in  exchange,  which  is  a  mathematical  ratio, 
a  quantitative  relation,  and  any  correct  theory 
of  value  must  explain  the  cause  and  measure  of 
such  ratios  in  exchange. 

It  is  clear,  says  Marx,  that  the  cause  of  value 
must  be  some  property  or  quality  which  all  com- 
modities have  in  common.  They  all  have  size, 
weight,  color,  and  other  physical  properties,  but 
these  have  no  direct  relation  to  value  in  exchange. 
They  all  have  utility,  but  utility  cannot  be  the 
cause  of  value,  for  "£100  worth  of  lead  is  of  as 
great  value  as  £  100  worth  of  silver  or  gold . ' '  There- 
fore, there  is  only  one  other  property  which  all 
commodities  have  in  common :  the  fact  that  they 
are  all  produced  by  human  labor. 

Labor,  then,  must  be  the  cause  and  measure 
of  value.  But  the  measure  of  labor  is  its  duration. 
Therefore  the  exchange  values  of  commodities 
are  determined  by  the  amount  of  labor-time 
incorporated  or  materialized  in  them.  But  labor 
may  be  misdirected.  Therefore  the  labor  which 
creates  value  must  be  " socially  necessary,"  or 
properly  applied  to  the  creation  of  utilities.  Marx 
thus  arrives  at  the  conclusion  that  "value  is  de- 
termined by  the  socially  necessary  labor-time  that 
is  required  to  produce  an  article  under  the  normal- 
conditions  of  production  and  with  the  average 
degree  of  skill  and  intensity  prevalent  at  the  time." 


THE  LABOR-COST  THEORY  OF   VALUE         15 

Value,  then,  is  determined  by  cost  of  production 
as  measured  in  labor- time. 

Such,  in  brief,  is  the  celebrated  labor-cost  theory 
of  value,  one  of  the  foundation  stones  of  the  Marx- 
ian system.  Orthodox  socialists  are  deeply  con- 
cerned to  prove  it  true,  for  if  it  can  be  shown  that 
all  values  are  created  by  labor  alone,  it  must  surely 
follow  that  all  should  belong  to  the  hand  and 
brain  that  created  them. 

At  first  glance  the  labor-cost  theory  has  the 
appearance  of  a  self-evident  proposition;  but  the 
more  one  considers  it,  the  more  unsatisfactory 
and  one-sided  it  seems  to  be.  However  sufficient 
it  may  be  to  explain  the  value  of  factory  products, 
it  certainly  does  not  account  for  the  value  of  land, 
particularly  of  unimproved  city  lots.  Such  land 
can  be  exchanged  for  cotton,  wheat,  hats,  silver, 
or  gold,  and  must  therefore  have  some  property 
in  common  with  them  all,  which  is  the  cause  and 
measure  of  its  value.  But  it  cannot  be  labor-cost, 
for  land  is  a  product  of  nature.  True,  land  would 
have  no  value  if  people  did  not  live  in  the  neigh- 
borhood and  apply  labor  to  other  pieces  of  land ; 
but,  in  so  far  as  the  particular  land  in  question  is 
concerned,  no  labor-time  has  been  applied  to  it, 
and  society,  which  gives  it  a  value,  stands  to  it  in 
the  relation  of  consumer  rather  than  that  of  pro- 
ducer. Marx  himself  is  conscious  of  difficulties 
such  as  these,  and  tries  to  evade  them  by  saying 


16  ORTHODOX  SOCIALISM 

that  land  is  not  a  commodity,  and  by  the  still 
more  absurd  statement  that  "an  object  may  have 
a  price  without  having  value;  for  instance,  the 
price  of  uncultivated  land,  which  is  without  value 
because  no  human  labor  is  incorporated  in  it." 

The  Marxian  theory  is  equally  incompetent  to 
account  for  the  value  of  labor-time  itself,  which 
must  be  regarded  as  a  commodity,  in  so  far  as  it 
can  be  bought  and  sold,  and  stands  with  wheat, 
silver,  and  all  other  commodities  in  the  infinite 
series  of  exchange  relations.  The  cost  of  produc- 
tion of  the  laborer  himself,  as  measured,  let  us  say, 
by  the  time  spent  on  his  education,  is  a  minor 
factor  in  the  determination  of  the  wages  which  he 
will  receive.  Native  ability,  the  power  and  the 
will  to  serve  mankind,  is  the  chief  factor  in  the  de- 
termination of  wages,  particularly  in  the  case  of 
men  of  talent  and  genius,  whose  rewards  are  gen- 
erally out  of  all  proportion  to  the  cost  of  their 
bringing-up.  Marx  tries  to  evade  this  difficulty 
also  by  saying,  "Labor  is  the  substance,  the 
immanent  measure  of  value,  but  has  itself  no 
value." 

The  socialist  theory  of  value  fairly  collapses  when 
it  comes  to  explain  the  value  of  "intangible  things, 
such  as  conscience  and  honor,"  which  are  fre- 
quently bought  and  sold,  as  when  a  citizen  sells 
his  vote,  or  an  alderman  barters  for  gold  that 
intangible  thing  which  he  calls  his  conscience. 


IVERSITY 

OF  J 

^ 

THE  LABOR-COST  THEORY  OF   VALUE         17 

Clearly,  a  man's  honor,  his  influence,  his  good 
name,  have  exchangeable  value,  but  Marx  asserts 
that  such  things  "have  a  price  without  having 
a  value,  the  price,  in  that  case,  being  imaginary, 
like  certain  quantities  in  mathematics."  Doubt- 
less a  politician's  conscience  may  be  imaginary, 
but  he  is  not  often  known  to  sell  it  for  imaginary 
gold.  The  price  which  he  receives  is  a  real  price, 
and  intangible  things  have  a  value  in  exchange, 
not  because  it  costs  labor- time  to  produce  them, 
but  because  they  are  useful  to  the  person  who 
is  willing  to  pay  the  price. 

When  we  come  to  commodities  hi  the  narrow, 
Marxian  sense  of  that  word,  we  find  innumerable 
exceptions  to  the  supposed  law  that  "commodities! 
in  which  equal  quantities  of  labor  are  embodied, 
or  which  can  be  produced  in  the  same  time,  have  i 
the  same  value."  Old  coins,  stamps,  manuscripts/ 
autographs,  birds'  eggs,  fossils,  and  the  thousand 
and  one  objects  dear  to  the  heart  of  collectors, 
are  surely  to  be  classed  as  commodities,  although 
there  is  no  discoverable  relation  between  their 
market  value  and  their  cost  of  production  as  meas- 
ured in  labor- time.  What  was  the  labor-cost  of 
the  Sistine  Madonna?  What  would  be  its  cost 
of  reproduction  ?  What  is  the  labor-cost  of  a  rare 
stamp  or  coin?  How  much  "congealed  labor" 
is  there  in  the  egg  of  that  extinct  bird,  the  Great 
Auk,  which  sold  some  years  ago  for  the  enormous 


18  ORTHODOX  SOCIALISM 

sum  of  $1200.  On  the  other  hand,  how  many 
hours  of  human  labor  did  it  cost  to  build  the 
pyramids,  how  many  sighs  and  tears  and  drops 
of  blood,  and  what  is  their  intrinsic  value  to-day  ? 

The  works  of  authors,  artists,  and  inventors 
are  commodities  in  the  strictest  sense  of  that  word, 
and  yet  their  market  value  has  no  definite  relation 
to  the  labor-time  spent  hi  their  production.  A 
popular  novelist  may  receive  $50,000  from  the  sale 
of  a  book  written  in  six  months,  while  his  less 
fortunate  brother,  after  spending  six  years  of  un- 
requited toil,  must  publish  his  book  at  his  own 
expense  and  then  is  not  able  to  give  it  away  to 
his  long-suffering  friends.  He  has  not  been  able 
to  produce  a  work  of  social  necessity;  therefore 
his  labor-time  is  wasted,  and  does  not  determine 
the  value  of  the  product.  Social  utility,  then,  is 
the  prime  factor  in  the  determination  of  value,  and 
labor-cost  is  a  matter  of  secondary  importance. 

Commodities  subject  to  the  caprice  of  fashion 
quickly  lose  their  value  when  their  usefulness  is 
gone,  no  matter  what  their  cost  of  production  or 
of  reproduction.  Many  persons  yet  living  remem- 
ber the  close  of  the  age  of  crinoline,  when  fashionable 
women  suddenly  ceased  to  surround  themselves 
with  a  congeries  of  wire  circlets,  vulgarly  known 
as  hoops.  Manufacturers  and  merchants  were 
left  with  vast  stocks  of  worthless  goods,  produced 
at  great  cost,  but  not  worth  their  weight  in  scrap- 


THE  LABOR-COST  THEORY  OF   VALUE          19 

iron.  Was  it  a  mere  coincidence  that  soon  there- 
after manufacturers  turned  their  attention  to  the 
production  of  barbed  wire  for  fences  of  another  kind  ? 

The  value  of  gold,  silver,  and  precious  stones  has 
little  relation  to  their  cost  of  production.  There 
are  mines  in  Colorado  where  gold  is  produced  at 
a  cost  of  less  than  $5  an  ounce,  and  there  are  other 
glittering  prospects  where  every  ounce  has  cost 
as  much  as  $100,  as  many  an  investor  in  mining 
stocks  will  sorrowfully  admit. 

Every  farmer  knows  that  the  labor-cost  theory 
fails  to  explain  the  value  of  agricultural  produce. 
On  some  lands  wheat  may  be  grown  at  a  cost  of 
50  cents  a  bushel;  on  poorer  lands  at  75  cents,  $1, 
or  $1.25,  and  yet  the  total  supply,  produced  at 
various  costs,  may  be  sold  on  the  same  market 
at  $1  a  bushel.  This  law  of  varying  costs  applies 
to  the  production  of  all  raw  materials :  grain,  meat, 
leather,  cotton,  wool,  sugar,  lumber,  iron,  clay, 
gold,  silver,  and  the  rest,  because  of  the  fact  that 
land  of  the  best  quality  is  limited  in  quantity. 
In  fact,  the  land-cost  of  these  commodities  has  as 
much  to  do  with  their  value  as  their  labor-cost. 
But  neither  land-cost,  labor-cost,  nor  capital- 
cost  can  be  regarded  as  of  prime  importance  in 
determining  the  value  of  the  product,  which  is  due 
first  of  all  to  utility,  or  the  power  which  commodities 
have  to  satisfy  human  wants. 

Finally,  the  value  of  staple  manufactured  articles, 


20  ORTHODOX  SOCIALISM 

fcictory  products,  such  as  cotton  and  woolen  goods, 
boots  and  shoes,  refined  sugar,  and  steel  rails,  is 
not  determined  chiefly  by  their  labor-cost.  In  the 
first  place,  the  value  of  the  raw  material  of  which 
they  are  composed  is  not  so  determined.  In  the 
second  place,  their  value  as  finished  products  is 
not  determined  solely  by  cost,  which  limits  supply, 
nor  by  utility,  which  controls  demand,  but  by 
both  of  these  factors  together.  Utility  and  cost 
are  the  two  factors  which  determine  value,  and  of 
these  utility  is  chief. 

The  business  man,  whose  profits  arise  from  an 
excess  of  revenue  over  expenditure,  and  whose 
losses  come  from  an  excess  of  expenditure  over 
revenue,  knows  well  that  the  value  of  his  goods 
depends  as  much  upon  the  demand  of  the  market 
as  upon  cost  of  production  to  himself  or  his  com- 
petitors. What  he  must  first  of  all  do  is  to  supply 
an  article  which  will  satisfy  some  human  want, 
otherwise  he  will  not  be  able  to  sell.  A  useless 
article  has  no  exchange  value,  no  matter  how  great 
its  cost.  The  mistakes  of  production,  responsible 
for  innumerable  failures  in  the  business  world, 
have  left  behind  a  vast  wreckage  of  "  materialized 
labor,"  produced  at  enormous  cost,  whose  exchange 
value,  if  any,  bears  no  relation  to  the  expenditure 
of  labor-time  involved  in  its  production,  but  a  very 
intimate  relation  to  its  present  lack  of  social  utility. 

The  defenders  of  Marxian  theory,  like  L.  B. 


THE  LABOR-COST  THEORY  OF   VALUE          21 

Boudin,  say  that  Marx  did  not  assert  that  the  mere 
expenditure  of  labor-time  was  sufficient  to  give 
value  to  the  product  of  labor,  but  insisted  that 
labor-power  must  be  directed  toward  the  produc- 
tion of  a  socially  useful  commodity.  This  is  true. 
Marx  did  admit  that  commodities  must  have  utility, 
else  they  could  have  no  value.  In  one  place  he 
says:  "Value  exists  only  in  articles  of  utility, 
in  objects.  If,  therefore,  an  article  loses  its  utility, 
it  also  loses  its  value."  This  is  a  very  significant 
admission,  quite  inconsistent  with  the  position 
that  labor-time,  and  that  alone,  is  the  cause  and 
measure  of  value.  If  the  loss  of  utility  involves 
the  loss  of  value,  then  utility  must  be  the  cause  or 
an  essential  part  of  the  cause  of  value. 

In  another  place  Marx  says,  "A  useful  article 
has  value  only  because  human  labor  in  the  abstract 
has  been  embodied  in  it."  That  this  statement 
is  out  of  harmony  with  the  facts  may  be  seen  from 
the  illustrations  given  above.  It  would  be  more 
correct  if  it  read  as  follows,  "An  article  in  which 
labor  has  been  embodied  has  value  only  because  it 
is  a  useful  article."  Not  all  commodities  which 
cost  labor  have  value,  but  all  commodities  which 
are  useful  have  value,  provided  that  they  are  suffi- 
ciently limited  in  quantity.  Utility,  then,  is  more 
essential  to  value  than  labor-cost,  as  in  the  case 
of  land,  which  has  value  and  utility,  but  no  labor- 
cost. 


22  ORTHODOX  SOCIALISM 

In  general,  however,  labor-cost  also  is  essential 
to  the  creation  of  value,  for  labor-cost  limits  the 
quantity  of  commodities  that  can  be  produced,  and 
useful  articles  must  be  limited  hi  quantity,  else 
then*  exchange  value  is  nothing. 

Socialists,  or  any  other  economists  who  lay  chief 
stress  upon  cost  of  production  as  the  determinant 
of  value,  are  reversing  the  natural  order  of  things, 
placing  that  first  which  should  be  second,  and  that 
second  which  by  nature  is  first.  All  commodities 
which  have  value  —  cotton,  wheat,  silver,  land, 
labor,  or  intangible  utilities  —  have  one  common 
property,  utility,  which  is  the  cause  and  the  meas- 
ure of  their  value.  Most  commodities  have  an- 
other common  property  —  labor-cost,  which  aids 
in  the  determination  of  value  by  limiting  supply. 
But  labor-cost  is  the  means,  and  utility  is  the  end 
of  the  productive  process,  and  logically,  as  well  as 
practically,  the  end  is  of  greater  consequence  than 
the  means.  It  is  utility  that  determines  demand, 
sets  in  motion  the  wheels  of  production,  and  gives 
value  to  the  land,  capital,  and  labor  which  are  the 
means  to  the  final  end  and  purpose  of  economic 
activity. 

And  so  it  is  social  service  that  is  the  test  of  value, 
and  not  the  expenditure  of  a  certain  amount  of 
labor-time.  The  measure  of  labor  is  not  its  dura- 
tion but  its  efficiency,  and  the  measure  of  efficiency 
is  the  utility  of  the  product.  It  is  not  time  that 


THE  LABOR-COST  THEORY  OF   VALUE          23 

counts,  but  what  is  done  in  that  time.  It  is  not 
cost  that  must  chiefly  be  considered,  but  the  ulti- 
mate goal  of  effort  and  sacrifice,  the  welfare  of  the 
human  race. 

Enlightened  socialists  of  the  present  day,  being 
obliged  to  abandon  the  Marxian  theory  of  value, 
insist  that  it  is  not  essential  to  the  development 
of  the  other  Marxian  doctrines,  especially  the  doc- 
trine of  surplus  value.  In  this  they  are  departing 
seriously  from  the  teachings  of  their  great  master, 
who  rightly  held  that  a  sound  theory  of  value  must 
be  the  foundation  stone  of  any  scientific  knowledge 
of  economic  evolution.  Of  his  own  work  he  says, 
"The  recent  scientific  discovery  that  the  prod- 
ucts of  labor,  so  far  as  they  are  values,  are  but  the 
material  expressions  of  the  human  labor  spent  in 
their  production,  marks  an  epoch  in  the  develop- 
ment of  the  human  race." 

Can  the  followers  of  Marx  abandon  so  important 
a  part  of  their  master's  teaching  and  still  call  them- 
selves socialists  of  the  orthodox  school?  Can 
they  deny  the  premises  of  his  argument  and  still 
assert  the  conclusion?  Can  they  reject  the  labor- 
cost  theory  and  still  hold  to  the  theory  of  surplus 
value?  If  so,  they  must  be  taking  surplus  value 
on  faith  or  inferring  it  from  other  premises. 


CHAPTER   III 

THE  IRON  LAW  OF  WAGES 

THE  Reverend  Thomas  Robert  Mai  thus,  in  the 
year  1798,  published  an  attack  upon  the  Utopian 
Socialism  of  his  day,  entitled,  "An  Essay  on  the 
Principle  of  Population,"  and  thus  became  the 
godfather  of  the  notorious  theory  that  bears  his 
name.  To  be  sure,  he  did  not  originate  the  theory, 
and  Karl  Marx  contemptuously  calls  his  work  a 
"school-boyish  superficial  plagiary  of  De  Foe, 
Townshend,  Wallace,  etc."  But  to  how  many  is  it 
given  to  create  a  new  idea  ?  Because  the  preacher 
said,  "There  is  nothing  new  under  the  sun," 
was  it  unlawful  for  Chaucer  to  give  a  new  version 
and  paraphrase  of  his  words  ?  - 

"  For  out  of  olde  feldes,  as  men  seith, 
Cometh  al  this  newe  corn  from  yeer  to  yere 
And  out  of  olde  bookes  in  good  feith 
Cometh  al  this  new  science  that  men  lere." 

Population,  says  Malthus,  tends  to  increase  in 
a  geometrical  ratio,  and  food,  because  of  the  law 
of  diminishing  returns,  tends  to  increase  in  an 
arithmetical  ratio.  Therefore,  unless  the  growth 
of  population  be  checked  in  some  way,  poverty  and 
misery  will  be  the  inevitable  result.  This  is  the 

24 


THE  IRON  LAW  OF   WAGES  25 

Malthusian  theory  of  population,  upon  which  is 
based  that  other  celebrated  theory,  commonly 
ascribed  to  Ricardo,  and  known  to  economics  as 
the  iron  law  of  wages. 

The  rate  of  wages,  according  to  this  so-called 
law,  is  determined  by  the  cost  of  living  of  the 
working  class,  the  quantity  of  commodities  neces- 
sary to  keep  the  laborers  alive  and  enable  them 
to  raise  families  to  take  their  places  after  they  are 
dead.  Wages,  it  is  said,  cannot  permanently  fall 
below  this  limit,  for,  if  they  do,  the  death  rate  will 
increase,  the  birth  rate  will  decline,  and  the  la- 
boring class  will  diminish  in  numbers  until  wages 
rise  to  their  natural  level.  Conversely,  wages  can- 
not permanently  exceed  the  minimum  of  subsist- 
ence, for  if  they  do,  laborers  will  marry  and  have 
children,  and  presently  the  oversupply  of  labor 
will  cause  wages  to  fall,  when  the  condition  of  the 
working  class  will  be  as  bad  as  it  was  before. 

It  was  this  doleful  theory,  with  its  corollaries 
and  consequences,  which  led  Carlyle  to  call  polit- 
ical economy  "the  dismal  science,"  and  it  is  this 
melancholy  point  of  view  which  many  socialists 
take  when  they  magnify  the  evils  of  the  capital- 
istic system,  and  say  that  "increasing  misery" 
must  follow  in  the  wake  of  capitalism  until  the 
social  revolution  shall  sweep  it  all  away. 

The  great  socialist  agitator,  Lassalle,  made 
much  of  this  law.  He  says,  "The  average  wage 


26  ORTHODOX  SOCIALISM 

always  remains  reduced  to  the  necessary  subsist- 
ence which  national  custom  demands  for  the  con- 
tinuation of  life  and  propagation."  In  the  Com- 
munist Manifesto  Marx  and  Engels  say,  "The 
average  price  of  wage-labor  is  the  minimum  wage, 
i.e.  that  quantum  of  the  means  of  subsistence  which 
is  absolutely  requisite  to  keep  the  laborer  in  bare 
existence  as  a  laborer."  In  " Capital"  Marx  says, 
"The  value  of  labor-power  is  determined  by 
the  sum  of  the  means  of  subsistence  necessary 
for  the  production  of  labor-power."  In  another 
place  he  states  that  the  growth  of  capitalism 
necessarily  involves  increasing  "misery,  oppres- 
sion, slavery,  degradation,  and  exploitation."  The 
Erfurt  Program,  issued  by  the  German  socialists 
in  1891,  similarly  declares  that  capitalistic  develop- 
ment means  "for  the  proletariat  and  the  declining 
intermediate  classes  a  growing  augmentation  of 
the  insecurity  of  their  existence,  of  misery,  op- 
pression, enslavement,  degradation,  and  exploita- 
tion." 

Karl  Marx,  it  is  true,  ridicules  the  Malthusian 
law  of  population.  It  would  be  disastrous  to 
socialistic  theory  to  admit  it.  If  population  must 
increase  with  every  improvement  in  economic 
conditions,  the  realization  of  the  socialistic  ideal 
will  only  result  in  greater  population  and  more 
hopeless  misery.  Marx,  therefore,  rejects  the 
theory  of  population  but  accepts  the  iron  law  of 


THE  IRON  LAW  OF   WAGES  27 

wages.  He  denies  the  cause  while  affirming  the 
effect.  The  effect,  then,  must  be  due  to  some 
other  cause. 

It  is  not,  says  Marx,  absolute  overpopulation 
that  depresses  wages,  but  the  very  nature  of  cap- 
italistic evolution,  which  constantly  creates  a 
relative  surplus  population,  an  industrial  reserve 
army,  the  army  of  the  unemployed,  who  are  will- 
ing to  work  for  any  wage  that  will  save  them  from 
starvation.  This  variation  of  the  iron  law  is  even 
more  pessimistic  than  the  views  of  Malthus  and 
Ricardo.  Not  only  may  there  be  a  population  too 
great  for  the  resources  of  a  country,  but  there  must 
always  be  an  active  army  of  workers  who  receive 
starvation  wages,  and  a  reserve  army  of  the  un- 
employed, ever  ready  to  supplant  the  wretched 
beings  who  are  constantly  displaced  by  labor- 
saving  machinery  and  other  wicked  devices  of 
exploiting  capitalists. 

It  is  refreshing  to  turn  from  gloomy  theories  like 
these  to  the  consolation  of  statistics,  compiled, 
socialists  say,  by  parasitic  professors  of  political 
economy,  but  for  all  that  more  reliable  than  the 
pipe-dreams  of  German  pessimists. 

T.  S.  Adams,  in  a  recent  chapter  on  "The  Mate- 
rial Progress  of  Wage-earners,"  shows  that  in  Mas- 
sachusetts, in  the  year  1672,  carpenters  received 
33  cents  a  day,  tailors  27  cents,  and  common 
laborers  27  cents,  without  board,  while  wheat 


28  ORTHODOX  SOCIALISM 

was  selling  at  81  cents  a  bushel,  corn  at  48  cents, 
and  oats  at  25  cents,  prices  very  close  to  those 
that  prevail  at  the  present  time,  when  money 
wages  are  from  five  to  ten  times  as  great  as 
they  were  200  years  ago.  Professor  Adams  also 
shows  that  the  rise  in  "real"  wages,  or  wages 
measured  in  purchasing  power,  has  gone  on,  de- 
spite occasional  interruptions,  until  the  present 
time.  For  every  $70  worth  of  goods  that  the  worker 
received  in  1866  he  received  $121  in  1902,  an  in- 
crease of  73  per  cent,  in  36  years.  The  figures 
given  by  Carroll  D.  Wright,  Edward  Atkinson,  and 
other  American  statisticians  are  equally  encour- 
aging. 

The  eminent  British  statistician,  Sir  Robert 
Giffen,  in  1883  showed  that  the  money  wages  of 
British  workmen  had  increased  in  50  years  "in 
most  cases  from  50  to  100  per  cent./'  while  the 
cost  of  living  had  decreased,  except  in  regard  to 
meat  and  rent.  Similar  figures  are  given  by 
A.  L.  Bowley  to  show  that,  in  the  30  years  ending 
1891,  wages  in  England  increased  from  15  to  76 
per  cent.,  being  an  average  increase  of  40  per 
cent.  In  the  35  years  ending  1895,  accord- 
ing to  Mulhall,  the  population  of  the  United 
Kingdom  increased  from  29,000,000  to  39,000,000, 
or  34  per  cent.,  while  hi  the  same  time  the  total 
wealth  increased  from  $7,200,000,000  to  $11,800,- 
000,000,  or  64  per  cent.,  and  the  per  capita,  or 


THE  IRON  LAW  OF   WAGES  29 

average  wealth,  increased  from  £249  to  £300,  or 
20  per  cent.  If,  then,  average  wages  have  in- 
creased 40  per  cent.,  while  average  wealth  has 
increased  only  20  per  cent.,  the  improvement  of 
the  working  classes  in  Great  Britain  is  more  than 
keeping  pace  with  the  increase  in  general  wealth. 

Similar  figures  could  be  given  for  France,  Ger- 
many, and  all  the  other  capitalistic  countries  of 
Europe,  and  it  would  be  clear  that  the  develop- 
ment of  capitalism  has  involved  not  only  an  in- 
crease in  the  laboring  population,  but  a  much 
greater  increase  in  real  wages.  We  must,  therefore, 
conclude  that  the  iron  law  of  wages  is  a  fallacy, 
and  the  law  of  increasing  misery  a  hideous,  but 
unreal,  nightmare.  Only  in  declining  countries, 
and  in  non-capitalistic  countries,  like  China  and 
India,  are  wages  kept  down  to  the  bare  cost  of 
living.  In  all  progressive  capitalistic  countries  — 
and  it  is  hard  to  give  an  example  of  a  capitalistic 
country  that  is  not  progressive  —  wages  have  risen, 
and  are  rising,  and  the  remedy  for  low  wages  is 
not  less  of  capitalism,  but  more  of  it;  just  as  the 
sufferer  from  snake  bite  is  sometimes  advised  to 
eat  a  piece  of  the  snake  that  bit  him. 

Enlightened  socialists,  while  disposed  to  scoff 
at  bourgeois  statistics,  are  obliged  to  admit  that 
they  are  not  wholly  erroneous,  and,  in  view  of 
facts  which  they  cannot  deny,  are  considerably 
modifying  the  extreme  doctrines  of  orthodox 


30  ORTHODOX  SOCIALISM 

Socialism.  "Increasing  misery,"  said  Kautsky, 
at  the  Liibeck  Congress  of  1901, "  is  to  be  understood 
only  as  a  tendency,  and  not  as  an  unconditional 
truth."  In  reply  to  him,  Dr.  David,  a  progres- 
sive socialist,  said,  "If  one  alters  one's  opinions, 
one  should  have  the  courage  and  the  strength  to 
say,  'We  made  a  mistake."3  Bebel,  hi  reply  to 
both  Kautsky  and  David,  asserted  that  Marx 
never  taught  the  theory  of  increasing  misery,  but 
only  the  doctrine  that  "  the  gap  between  the  work- 
ing class  and  the  rich  class  to-day  is  greater  than 
ever  before,"  and  that  for  this  reason  the  class 
struggle  is  ever  growing  more  intense  and  more 
bitter. 

But  why  should  socialists  desire  to  uphold  the 
law  of  increasing  misery  ?  If  the  working  class  are 
daily  and  yearly  sinking  deeper  into  the  slough 
of  misery  and  degradation,  what  hope  can  there 
be  of  their  ever  getting  out  of  it?  It  is  freemen, 
and  not  slaves,  who  most  desire  the  blessings  of 
liberty.  The  British  colonists  in  America  rebelled, 
not  because  they  had  less  liberty  and  fewer  privi- 
leges than  were  granted  to  French  or  Spanish  colo- 
nists, but  because  they  had  more  of  them.  They 
loved  liberty  and  the  pursuit  of  happiness  because 
they  knew  by  experience  how  valuable  they  were. 
The  working  class  of  civilized  countries,  like  pro- 
gressive people  everywhere,  are  never  satisfied. 
The  more  they  have,  the  more  they  want,  and  some 


THE  IRON  LAW  OF   WAGES  31 

day  they  may  want  social  revolution  and  fight 
to  bring  it  about.  Kautsky  says,  "We  all  agree 
that  the  emancipation  of  the  proletariat  is  to  be 
expected,  not  from  its  increasing  decadence,  but 
from  its  growing  strength." 

But  if  the  improvement  of  the  working  class 
is  encouraging  to  the  socialist,  it  is  even  more 
encouraging  to  those  who  hope  that  industrial  evo- 
lution will  not  bring  about  the  destruction  of  cap- 
italism and  individual  enterprise,  but  the  control 
and  improvement  of  them.  If  such  progress  has 
been  made,  in  spite  of  the  monopolistic  tendencies 
of  unregulated  capitalism,  may  one  not  expect  that 
control  of  monopolies  and  improvement  in  systems 
of  taxation,  together  with  the  growing  power  of 
organized  labor,  will  secure  to  the  laborer  higher 
wages,  to  the  consumer  more  reasonable  prices, 
and  to  society  in  general  a  more  equitable  dis- 
tribution of  wealth?  At  any  rate,  the  outlook 
is  far  from  dismal.  Progress  in  the  past  gives 
reason  to  hope  for  the  future,  and  so  long  as  capital- 
ism can  hold  out  a  reasonable  hope  to  the  laboring 
class,  one  may  be  sure  that  the  long-suffering 
public  will  hesitate  to  say,  "Cut  it  down,  why 
cumbereth  it  the  ground?" 


CHAPTER  IV 

SURPLUS  VALUE 

THE  socialist  hates  capitalism  with  a  perfect 
hatred.  To  him  it  is  a  system  of  robbery,  by 
which  the  capitalist,  who  does  nothing,  takes  from 
the  laborer,  who  does  everything,  most  of  the 
fruits  of  his  labor.  All  value  is  created  by  labor, 
but  the  laborer  receives  in  wages  barely  enough 
to  keep  huii  alive,  while  the  "vampire  capitalist" 
fattens  upon  the  ever  increasing  mass  of  surplus 
value. 

A  simple  illustration  will  explain  the  apparently 
abstruse  theory  of  surplus  value.  Here  is  a  poor 
farmer  who,  by  hard  work  upon  unfruitful  soil, 
has  produced  a  thousand  bushels  of  wheat.  Now 
comes  a  grain  dealer  and  buys  the  crop  at  75  cents 
a  bushel,  which  he  presently  sells  in  a  neighboring 
city  for  80  cents  a  bushel,  thus  making  a  profit 
of  $50  upon  the  transaction.  At  this  point  Karl 
Marx  discovers  robbery  and  exploitation.  He 
says,  "This  increment  or  excess  over  the  origi- 
nal value  I  call  surplus  value,"  and  he  quotes  with 
approval  the  words  of  Franklin:  "War  is  rob- 
bery; commerce  is  generally  cheating." 

But  it  is  just  here  that  the  man  of  common  sense 


SURPLUS   VALUE  33 

must  differ  with  Franklin  and  Karl  Marx,  and 
assert   that,  whatever   may  be   thought  of  war, 
commerce,  under  competitive  conditions,  is  gen-/,' 
erally  fair  exchange  and  no  robbery.    The  farmer  /*J*jfc^ 
evidently  received  the  value  of  his  gram,  or  he     ' 
would  have  held  it  for  a  higher  price.    The  miller  / 
in  the  city  paid  no  more  than  the  wheat  was  worth, 
or  he  would  have  bought  it  of  another  dealer  or 
directly  from  the  farmer  himself.    There  are,  then, 
two  values  in  the  case,  the  value  in  the  country 
and  the  value  in  the  city,  and  the  profit  of  $50 
represents  the  value  of  the  dealer's  services  to    LA^L 
farmer   and  miller.    Without  him   the   price   of 
wheat  would  have  been  higher  in  the  city  and  lower 
in  the  country.    Instead  of  fearing  grain  dealers, 
the  farmers  are  glad  to  see  them,  and  instead  of     '" 
wishing  to  destroy  such  robbers  and  exploiters, 
the  farmers  rejoice  to  see  their  tribe  increase. 

As  to  the  theory  of  surplus  value,  it  is  clear  that 
Marx  has  placed  himself  upon  the  horns  of  a  most 
ridiculous  dilemma,  which  may  be  stated  thus: 
Either  commodities  exchange  at  their  value,  or 
they  do  not.  If  they  do,  there  is  no  surplus  value. 
If  they  do  not,  the  labor-cost  theory  gives  no  expla- 
nation of  value  in  exchange  and  must  be  given  up 
as  an  unscientific  and  useless  part  of  socialistic  doc- 
trine. Therefore  the  advanced  socialists,  preferring 
the  lesser  of  the  two  evil  alternatives,  have  rejected 
the  labor-cost  theory  of  value,  while  holding  fast 


34  ORTHODOX  SOCIALISM 

to  the  theory  of  surplus  value,  and  firmly  saying 
to  every  seeker  after  economic  truth,  "  Believe 
in  exploitation  and  you  are  a  socialist." 

Believers  in  exploitation,  though  lacking  in 
scientific  demonstration,  find  support  for  their 
views  in  statistics,  which  show  that  the  wealth 
of  the  world  is  not  equally  distributed,  and  they 
are  quick  to  draw  the  inference  that  a  distribution 
so  unequal  must  be  inequitable  as  well.  Charles 
B.  Spahr  estimates  that  one  per  cent,  of  the  fami- 
lies of  the  United  States  own  one  half  of  the  wealth, 
and  that  the  same  one  per  cent,  receive  one 
fourth  of  all  incomes;  while  the  remaining  99 
per  cent,  own  but  one  half  of  the  wealth  and 
receive  only  three  fourths  of  the  national  income. 
The  wealthy  minority  includes  such  people  as  the 
Astors,  Goulds,  Vanderbilts,  Rockefellers,  and 
Carnegies,  whose  services  to  society,  however 
great,  seem  greatly  overpaid,  when  compared 
with  those  of  the  rank  and  file  of  the  industrial 
army. 

The  statistics  of  manufacturing  establishments, 
in  the  report  of  the  United  States  Census  for  1900, 
show  that  a  large  part  of  the  product  of  industry 
goes  to  the  capitalist  in  the  form  of  interest  and 
profits.  According  to  these  figures,  which  probably 
exaggerate  rather  than  minimize  the  amount  of 
profit,  there  were,  in  round  numbers,  500,000 
manufacturing  establishments  in  the  United  States, 


SURPLUS   VALUE  35 

using  $10,000,000,000  of  capital  and  employing 
5,000,000  wage-earners.  The  value  of  the  yearly 
product  was  $13,000,000,000,  while  $7,400,000,000 
was  paid  for  materials,  $1,000,000,000  for  miscella- 
neous expenses,  and  $2,700,000,000  for  labor,  leav- 
ing $2,000,000,000  as  the  share  of  the  capitalist, 
for  the  payment  of  dividends  and  the  mainte- 
nance of  reserves. 

The  statistics  of  railways  in  the  United  States, 
as  given  in  the  Report  of  the  Interstate  Commerce 
Commission  for  1904,  also  shows  that  capitalists 
receive  a  large  share  in  the  product  of  industry, 
though  not  a  large  percentage  upon  the  capital 
invested.  The  capitalization  of  the  railways  of 
the  United  States  in  that  year  was  $13,213,124,679, 
and  1,296,121  employees  received  wages  amount- 
ing to  $817,598,810,  while  the  net  earnings,  less 
taxes,  amounted  to  $623,509,113,  being  4.72 
per  cent,  upon  the  capital  invested,  or  9.44  per 
cent.,  if  we  suppose  the  roads  to  be  capitalized 
at  double  their  actual  cost. 

The  amount  of  "  surplus  value,"  then,  is  very 
large,  so  that,  taking  rent  into  consideration,  one 
might  not  be  far  wrong  in  saying  that  for  every 
dollar  paid  to  the  wage-earner,  another  dollar  goes 
to  the  capitalist  in  the  form  of  rent,  interest,  and 
profits.  The  figures  commonly  given  by  socialists 
are  far  in  excess  of  this  rough  estimate,  but  the 
statistics  compiled  by  Spahr  are  much  more  con- 


36  ORTHODOX  SOCIALISM 

servative,  showing  that  the  aggregate  income  from 
labor  in  the  United  States,  about  the  year  1890, 
was  $6,460,000,000,  while  the  aggregate  income 
from  capital  ^as  only  $4,340,000,000,  or  about 
43  per  cent,  of  the  national  income.  Estimates 
like  these  take  no  account  of  the  losses  of  capital, 
which  are  very  large,  and  which  should  be  deducted 
from  the  aggregate  income  of  capital,  in  order  to 
show  the  net  income  of  capital,  the  true  "surplus 
value." 

But,  whether  large  or  small,  surplus  value, 
socialists  assert,  is  created  by  labor  alone,  and 
stolen  from  labor  by  the  iniquitous  capitalistic 
system.  They  admit  that  labor  can  do  nothing 
without  capital,  but  vehemently  contend  that  cap- 
ital itself  is  the  product  of  past  labor,  and,  in  justice, 
should  belong  to  the  laborers  of  the  present  day. 
They  do  not  object  to  capital,  as  such,  but  to  the 
private  ownership  of  capital,  by  which  the  toil 
of  millions  of  workers  serves  to  enrich  a  few  idle 
robbers  and  insatiable  parasites.  "Capital,"  says 
Marx,  "is  dead  labor,  that,  vampirelike,  lives  by 
sucking  living  labor." 

Now  there  is  in  this  argument  a  subtle  and  in- 
sidious fallacy,  turning  upon  the  use  of  the  words 
"labor"  and  "laborers,"  "capital"  and  "capi- 
talists," as  though  all  capital  were  owned  by 
capitalists  and  all  labor  were  done  by  laborers  of 
the  property  less  class.  It  is  not  true  that  all  the 


SURPLUS   VALUE  37 

laborers  of  the  United  States  are  utter  proletarians 
owning  no  capital.  Thousands,  and  even  millions, 
of  them  have  modest  savings  invested  in  some 
productive  way :  a  house,  a  piece  of  land,  a  small 
mortgage,  an  insurance  policy,  a  few  dollars  in 
the  bank,  a  little  store  laid  up  for  a  rainy  day. 
The  misery  of  their  condition  is  due  to  the  fact  that 
they  have  so  little  capital,  and  are  so  much  depend- 
ent upon  a  single  source  of  income  —  the  labor 
of  their  hands. 

So  there  are  many  laborers  who  are  capitalists, 
though  in  a  small  way,  and  it  is  equally  true  that 
there  are  many  capitalists  who  are  truly  workers 
and  producers  of  wealth.  Capitalists  may  be 
divided  into  two  classes:  those  who  are  actively 
engaged  in  business,  and  those  who  have  retired 
from  active  business,  or  have  never  entered  into 
it.  The  latter  class  is  composed  of  administrators 
of  estates  and  benevolent  endowments,  insurance 
and  trust  companies,  retired  business  men  and 
men  of  leisure,  widows,  clergymen,  teachers, 
physicians,  laborers;  and,  in  general,  people  of 
the  middle  class,  who,  owning  more  or  less  capital, 
and  unable  or  unwilling  to  manage  it  in  any  profit- 
able way,  put  it  into  safe  investments,  at  low  rates 
of  interest. 

The  former  class,  on  the  other  hand,  is  made  up 
of  active  capitalists,  young  men  and  men  hi  the 
prime  of  life,  using  their  own  capital  and  that  of 


38  ORTHODOX  SOCIALISM 

others  in  the  management  and  promotion  of  enter- 
prises old  and  new,  taking  all  the  risks  of  business, 
guaranteeing  interest  to  the  bondholder  and  wages 
to  the  laborer,  bearing  the  losses  that  occur  and 
taking  to  themselves  the  lion's  share  of  the  profits. 
Farmers  are  men  of  this  class;  so  also  are  mer- 
chants and  manufacturers,  bankers  and  brokers, 
and  the  small  but  influential  class  of  people  who 
have  a  controlling  interest  in  the  stocks  of  rail- 
ways, telegraph  companies,  and  other  great  busi- 
ness corporations,  and  are  the  head  and  front  of 
progress  in  the  industrial  world. 

How  can  it  be  said  that  active  capitalists  do 
not  work  ?  The  work  that  they  do  is  both  difficult 
and  important,  requiring  ceaseless  activity  and 
great  strength  of  body  and  mind,  and  promoting 
the  welfare  of  society  in  a  very  high  degree.  Under 
competitive  conditions,  neither  the  laborer  nor 
the  consumer  is  exploited  by  them,  for  wages  rise 
and  prices  fall,  while  new  fields  of  labor  are  opened 
up,  new  and  varied  products  are  created,  and  under 
such  leadership  the  country  is  able  to  maintain 
a  large  and  constantly  increasing  population. 
Great  may  be  their  rewards,  but  great  also  are  the 
services  which  they  perform.  Every  community 
can  point  to  a  few  men  of  this  kind,  to  whom,  in 
large  measure,  its  prosperity  is  due ;  and  when  one 
contemplates  the  vast  and  complicated  mechanism 
of  modern  industry,  one  finds  it  hard  to  see  how 


SURPLUS    VALUE  39 

it  could  be  operated  by  society  itself,  without 
the  aid  of  private  enterprise,  and  the  motive 
power  of  private  profit. 

So  it  must  be  admitted  that  active  capitalists 
are  nQljaantsites,  that  they  perform  an  important 
economic  function,  and  that  the  profits  which  they 
receive,  when  competition  prevails,  are  to  a  large 
extent  the  product  of  their  own  industry  and  not 
a  surplus  value  stolen  from  the  proletariat.  But 
what  must  one  think  of  the  idle  capitalists,  land- 
owners, and  bondholders,  who  do  no  work  at  all, 
but  merely  lend  their  property  to  active  capitalists, 
who  use  it  productively  and  return  to  the  owners 
a  part  of  the  product  in  the  form  of  rent  or  interest. 
Surely  here  is  a  class  of  exploiters  and  parasites, 
useless  and  even  injurious  to  society,  reaping  where 
they  have  not  sown  and  gathering  where  they  have 
not  strawed. 

Plausible  as  this  line  of  reasoning  is,  it  overlooks 
the  fact  that  the  taking  of  interest  is  inseparably 
connected  with  the  institution  of  private  property. 
The  use  of  property  for  a  given  time  is  something 
which  has  a  value  in  exchange.  Active  capital- 
ists are  glad  to  get  it,  expecting  to  use  it  so  as  to 
earn  the  stipulated  interest  and  an  indefinite 
amount  of  profit  besides.  Laborers  are  not  ex- 
ploited, for  the  active  use  of  capital  insures  to 
them  constant  and  remunerative  employment. 
There  is,  in  fact,  no  reason  why  the  owners  of 


40  ORTHODOX  SOCIALISM 

property  should  lend  their  capital  without  interest 
that  is  not  at  the  same  time  a  reason  why  they 
should  give  it  all  away  without  any  equivalent 
or  consideration. 

If,  then,  the  taking  of  interest  is  robbery,  the 
whole  institution  of  private  property  is  robbery, 
and  that  is  exactly  what  the  socialists  say.  "  Prop- 
erty is  theft,"  says  Proudhon;  and  if  he  is  right, 
then  the  taking  of  interest  is  theft  also;  but  if 
he  is  wrong,  and  the  institution  of  private  prop- 
erty is  socially  beneficial,  then  he  who  lends  his 
money  at  interest  is  no  more  a  thief  than  he  who 
demands  $100  for  an  acre  of  land  or  $1  for  a 
bushel  of  wheat. 

While  defending  the  institution  of  private  prop- 
erty, and  asserting  that  the  essential  feature  of 
business  activity  is  not  exploitation  but  fair  ex- 
change of  material  things  and  personal  services, 
it  would  be  absurd  to  say  that  there  are  no  abuses 
connected  with  the  present  system,  no  exploita- 
tion, robbery,  nor  unfairness  of  any  kind. 

Where  there  are  so  many  and  such  loud  complaints, 
there  must  surely  be  grievances  of  considerable  mag- 
nitude. Laborers  complain  of  low  wages  and  long 
hours  and  think  that  they  are  cheated  at  every 
turn.  Consumers  of  coal,  kerosene,  sugar,  beef, 
and  all  the  other  necessaries  of  life  cry  out  against 
monopoly  prices  for  inferior  goods,  and  cannot 
be  convinced  that  the  vast  fortunes  of  the  present 


SURPLUS    VALUE  41 

day  have  been  accumulated  by  honest  toil  or  faith- 
ful service  toward  God  or  man.  Manufacturers 
and  merchants  rebel  against  the  power  of  railroads 
that  eat  up  their  profits  by  excessive  charges,  or 
hand  them  over  to  their  rivals  by  discriminating 
rates.  Investors  complain  of  unscrupulous  pro- 
moters, who,  from  the  milk  of  promising  enter- 
prises, skim  off  the  cream  of  the  profits  and  add 
barrelfuls  of  water  besides.  Professors  of  political 
economy,  usually  content  to  describe  economic 
conditions  with  scientific  precision  and  philosophic 
calm,  are  obliged  to  admit  that  all  is  not  welHn 
the  body  economic,  and  that  in  the  midst  of  free 
competition,  so  called,  there  are  many  opportunities 
for  the  robber-barons  of  industry  to  levy  toll  upon 
the  weak  and  blackmail  upon  the  strong.  Capi- 
talists  themselves,  conscious  of  possessing  wealth 
which  they  have  not  earned,  striving,  like  Zacchseus 
.o£^oid,  to  perform  an  act  of  restitution  and  justice, 
are  met  with  scorn  and  ingratitude  on  every  side. 
Clergymen,  even,  usually  so  charitable  toward  all 
mankind,  have  serious  scruples  about  accepting 
tainted  gold  for  religious  purposes,  saying,  in  the 
vehement  words  of  Isaiah,  "I  hate  robbery  for 
burnt  offering!" 

So  many  and  so  great  are  the  evils  connected 
with  capitalism  that  if  one  looks  only  at  the  dark 
side  of  it,  as  socialists  are  apt  to  do,  one  finds  it 
very  dark,  with  hardly  a  ray  of  light,  hardly  a  gleam 


42  ORTHODOX  SOCIALISM 

of  brightness  giving  promise  of  better  things.  If, 
on  the  other  hand,  one  looks  on  the  bright  side 
of  capitalism,  one  finds  that  it  is  very  bright  in- 
deed. It  has  been  the  chief  cause  of  the  vast 
improvement  in  social  conditions  that  has  made 
the  nineteenth  century  notable  in  the  history  of 
mankind.  It  has  unproved  land  and  developed 
mines.  It  has  built  roads,  bridges,  and  canals. 
It  has  united  the  countries  of  the  world  by  steam- 
ships, railroads,  and  telegraph  lines.  -It  has  built 
great  cities  wherein  dwell  millions  of  people  in  a 
degree  of  comfort  unknown  to  the  aristocrats  of 
former  times.  It  has  created  schools,  colleges, 
libraries,  hospitals,  and  a  thousand  agencies  for 
the  betterment  of  social  conditions.  It  has  in- 
creased the  wages  of  labor  and  the  average  duration 
of  human  life.  It  has  improved  morality,  abol- 
ished famine  and  pestilence,  and  mitigated  the 
horrors  of  war.  It  has  elevated  the  working  class 
to  the  level  of  the  middle  class  of  two  hundred 
years  ago,  and  the  middle  class  it  has  raised  to 
the  level  of  the  nobles  and  princes  of  those  days. 
It  has  created  democracy,  and  the  inestimable 
privilege  of  personal  liberty.  The  countries  where 
capitalism  has  most  prevailed  are  the  countries 
where  the  laboring  man  receives  the  highest  wages 
and  maintains  the  highest  standard  of  living. 
The  countries  where  capitalism  has  done  least,  as 
China,  India,  and  Russia,  are  the  countries  where 


SURPLUS    VALUE  43 

wages  are  lowest,  where  the  laboring  man  is  ever 
on  the  verge  of  starvation,  and  where  he  is  most 
exploited  by  the  merchant,  the  money  lender,  and 
the  government  official. 

Why,  then,  should  one  underestimate  the  vi- 
tality of  capitalism,  and  think  that,  like  an  aged 
tree,  it  is  decaying  at  the  root  and  rotten  at  the 
heart?  Is  it  not  still  young  and  flourishing,  and, 
in  spite  of  some  decaying  branches,  which  the 
pruning  knife  can  remove,  is  it  not  sound  at  the 
root  and  solid  at  the  core?  The  answer  to  this 
question  is  the  assent  to  Socialism  or  the  denial  of 
it.  . 

The  capitalistic  system,  with  all  its  faults,  is 
well^auited  to  the  present  state  of  human  nature. 
There  is  in  man,  as  in  the  universe,  a  principle  of 
attraction  and  a  principle  of  repulsion,  a  centrip- 
etal force,  and  a  force  centrifugal,  and  it  is  by 
means  of  these  two  forces  that  the  groups  of  which 
society  is  composed  are  drawn  together  and  thrust 
apart.  Man  is  a  social  animal,  but  he  is  also  anti- 
social in  his  disposition,  and,  so  long  as  this  is  the 
case,  it  will  be  impossible  for  the  various  and 
conflicting  elements  of  which  society  is  composed 
to  combine  into  a  single,  harmonious,  cooperative 
group.  But  if  such  a  group  were  ever  formed,  the 
individual  molecules  of  the  combination,  by  virtue 
of  their  individual  interests  and  antipathies,  would 
split  it  up  into  certain  smaller  parts,  large  enough 


44  ORTHODOX  SOCIALISM 

to  secure  the  advantages  of  harmony  and  peace, 
and  small  enough  to  secure  the  counter  benefits 
of  rivalry  and  war. 

But  we  need  have  little  fear  that  the  New  Jeru- 
salem of  Socialism  will  descend  upon  us  in  a  day, 
or  that  a  cataclysmal  revolution  will  in  a  moment 
sweep  away  the  accumulated  experience  of  thou- 
sands of  years.  Recent  socialists  are  inclined  to 
discredit  the  idea  of  such  a  revolution,  and  to  up- 
hold the  opinion  that  a  long  series  of  changes  will 
bring  about  the  gradual  replacement  of  capitalism 
and  the  growth  of  a  new  system  out  of  the  body  of 
the  old. 

There  is  little  difference  between  this  view  and 
that  of  the  idealistic  economist,  who  believes  that 
capitalism,  though  by  no  means  perfect,  is  measur- 
ably perfectible,  and  that  improvements  and  ad- 
justments will  step  by  step  be  made  which  will  to  a 
large  extent  do  away  with  the  exploitation  that 
exists,  remove  many  antagonisms  and  causes  of 
friction,  and,  as  far  as  may  be  possible  to  finite 
intelligence,  realize  the  ideal  of  justice  between  man 
and  man. 


CHAPTER  V 

MACHINERY 

THE  use  of  machinery,  and  of  various  methods 
of  production  connected  with  it,  is  the  most  char- 
acteristic feature  of  modern  industry.  Countries 
like  China,  where  nearly  everything  is  done  by 
hand,  without  the  aid  of  complicated  and  expen- 
sive machinery,  are  still,  in  so  far  as  industry  is 
concerned,  in  the  ancient,  or  mediaeval,  period  of 
their  history.  The  change  from  ancient  to  modern 
methods,  commonly  called  the  Industrial  Revolu- 
tion, which  began  in  England  toward  the  end  of  the 
eighteenth  century,  and  presently  spread  to  other 
western  countries,  was  brought  about  by  the  in- 
vention of  such  machines  as  the  spinning-jenny, 
the  power  loom,  the  cotton  gin  and  the  steam 
engine.  Since  that  time  revolutionary  changes 
have  been  made  in  almost  every  field  of  industry, 
by  the  invention  of  the  steamship,  the  locomotive 
engine,  the  telegraph,  the  telephone,  stenography, 
typewriting  and  a  host  of  other  labor-saving 
machines  and  methods,  so  that  wherever  possible 
machines  are  used  instead  of  men,  and  one  is  in- 
clined to  think  that  the  time  is  coming  when  human 

45 


46  ORTHODOX  SOCIALISM 

labor  will  be  no  longer  needed  and  machine-owning 
capitalists  alone  will  possess  the  earth. 

Orthodox  socialists  profess  to  be  unable  to  see 
any  benefit  to  the  laboring  class  arising  from  the 
use  of  machinery,  so  long  as  it  remains  in  private 
hands.  Their  views  are  substantially  the  same  as 
those  of  Karl  Marx,  as  expounded  in  "Capital," 
and  may  be  stated  as  follows :  — 

1.  Machinery  increases  the  product  of  industry, 
but  the  surplus  goes  to  the  employer  in  the  form 
of  larger  profits  and  not  to  the  laborer  in  the  form 
of  higher  wages.  Wages  are  determined  by  the 
cost  of  living  of  the  race  of  laborers  and  not  by  the 
productivity  of  their  labor;  therefore,  to  increase 
the  product  of  industry  is  to  increase  exploitation 
and  surplus  value  without  improving  the  condition 
of  the  laboring  man.  In  the  words  of  Marx, 
"The  immediate  result  of  machinery  is  to  aug- 
ment surplus  value  and  the  mass  of  products  in 
which  surplus  value  is  embodied." 

Again,  wages  are  paid  out  of  "variable  capital," 
consisting  of  food,  clothing,  and  the  other  neces- 
saries of  life.  Now,  to  increase  machinery  is  to 
multiply  "constant  capital,"  which  cannot  be 
used  in  payment  of  wages,  while  variable  capital 
relatively  declines.  If,  then,  the  fund  out  of  which 
wages  are  paid  relatively  declines,  while  the  labor- 
ing population  goes  on  increasing,  it  is  clear  that 
wages  must  fall,  and  the  laboring  class  must  be 


MACHINERY  47 

plunged  into  the  bottomless  abyss  of  increasing 
misery. 

2.  Machinery  constantly  displaces  labor,  creat- 
ing a  vast  number  of  unemployed  workers,  the 
"industrial  reserve  army,"  whose  eager  struggle 
for  work  depresses  the  wages  of  those  who  remain 
employed,  thus  increasing  the  misery  and  degrada- 
tion of  the  working  class  as  a  whole,  and  recruiting 
the  ranks  of  paupers  and  criminals.    With  regard 
to   the  industrial  revolution,    Marx  says,  "  His- 
tory discloses  no  tragedy  more  horrible  than  the 
gradual  extinction  of  the  hand-loom  weavers." 
He  thinks,  too,  that  capitalists  desire  to  perpetuate 
this  fearful  condition  of  affairs,  in  order  that  they 
may  have  abundance  of  cheap  labor.    He  says 
again,   "The  whole    form    of    the   movement    of 
modern  industry  depends  upon  the  constant  trans- 
formation of  a  part  of  the  laboring  population  into 
unemployed,  or  half -employed,  hands." 

3.  "Machinery,"    says    Marx,    "is    the    surest 
means  of  lengthening  the  working  day,"  since  it  is 
unproductive  while  idle,  and  the  capitalist,  there- 
fore, desires  to  keep  it  going  all  the  time.    Ma- 
chinery also  increases  the  intensity  of  labor  and 
furthers  the  introduction  of  the  system  of   piece 
wages,  which,  says  Marx,  "is  the  most  fruitful 
source  of  reductions  in  wages,   and   capitalistic 
cheating." 

4.  Machinery  is  the  chief  cause  of  the  speciali- 


48  ORTHODOX  SOCIALISM 

zation  of  labor,  which  has  a  narrowing  influence 
upon  the  laborer,  both  physically  and  mentally, 
and  makes  it  difficult  for  him  to  find  employment 
when  he  is  out  of  work. 

5.  Machinery  makes  possible  the  employment 
of  women  and  children,  thus  displacing  men  and 
reducing  the  wages  of  the  family  as  a  whole  to  the 
level  of  those  formerly  earned  by  the  man  alone. 

6.  Machinery  increases  the  number  of  unpro- 
ductive laborers,  as  domestic  servants,  clergymen, 
lawyers,  teachers,  actors,  and  musicians,  the  "  mod- 
ern domestic  slaves,"  who  render  personal  services 
to  the  rich,  but  do  little  or  nothing  for  the  public 
good. 

7.  Machinery  creates  a  mass  of  products  for 
which  there  is  no  demand,  because  the  working 
class,  with  their  low  wages,  are  unable  to  buy  them ; 
and  this  is  the  chief  cause  of  the  periodical  crises, 
so  characteristic  of  modern  capitalism. 

8.  These  evils  belong  not  to  the  use  of  machinery 
in  itself,  but  to  the  private  ownership  of  it,  and  will 
disappear  when  machinery  and  all  other  capital 
are  owned  and  operated  by  the  working  class. 

Such  are  some  of  the  arguments  urged  by  social- 
ists against  the  "capitalistic  employment  of 
machinery."  In  every  case  there  is  a  certain 
amount  of  truth  in  their  contention,  enough  to  give 
the  entire  argument  an  appearance  of  truth  with- 
out the  substance  of  it.  On  the  other  side  it  can 


MACHINERY  49 

be  shown  that  labor-saving  machinery,  while  it 
has  enriched  the  capitalist  class,  has  brought 
great  and  permanent  benefits  to  the  laboring 
class,  enabling  them  to  maintain  a  standard  of 
comfort  possible  only  to  those  who  live  in  highly 
developed  capitalistic  countries.  A  brief  exami- 
nation will  show  the  essential  errors  of  the  socialist's 
position. 

1.  When  socialists  admit  that  machinery  in- 
creases the  product  of  industry,  they  practically 
admit  that  the  capitalist  cannot  keep  the  surplus 
products  thus  acquired.  The  product  per  laborer 
is  greatly  increased,  and  the  value  of  the  laborer 
to  his  employer  is  correspondingly  increased. 
After  the  cotton  gin  was  invented,  it  was  possible 
to  increase  the  output  of  cotton  hi  the  Southern 
States,  and  the  consequent  increased  demand  for 
labor  resulted  in  a  remarkable  rise  in  the  price  of 
slaves  and  a  similar  rise  in  the  wages  of  free  labor. 

Except  where  machinery  is  monopolized,  com- 
petition between  capitalists  causes  prices  to  fall 
and  wages  to  rise,  so  that  a  large  part  of  the  in- 
creased product  goes  to  the  laborers  in  the  form  of 
higher  wages  and  reduced  cost  of  living.  To  say 
that  the  laboring  population  will  soon  multiply 
and  thus  bring  the  rate  of  wages  down  to  the 
level  of  the  bare  cost  of  living,  is  to  appeal  to  the 
Malthusian  doctrine,  which  Marx  so  justly  ridicules, 
but  at  the  same  time  tacitly  adopts.  As  a  matter 


50  ORTHODOX  SOCIALISM 

of  fact,  in  every  capitalistic  country  wealth  has  in- 
creased more  rapidly  than  population,  and  money 
wages  have  risen,  while  the  cost  of  living  has  been 
considerably  reduced. 

The  distinction  that  Marx  draws  between  con- 
stant and  variable  capital  is  a  very  important  one, 
but  leads  to  conclusions  directly  opposite  to  those 
drawn  by  him.  Machinery,  buildings,  and  other 
constant  capital  cannot  increase  without  a  cor- 
responding increase  in  cotton  and  cotton  goods, 
iron  ore  and  steel  products,  wheat,  flour  and  bread, 
cattle  and  beef,  timber  and  lumber,  and  all  the 
forms  of  variable  capital  or  goods  available  as 
food,  clothing,  and  shelter  for  the  laboring  class. 
Constant  capital  exists  for  the  sake  of  producing 
variable  capital ;  it  is  a  means  to  that  end.  More- 
over, it  is  in  the  production  of  staple  articles,  such 
as  the  poor  consume,  that  machinery  is  most  used, 
and  not  in  the  production  of  luxuries  for  the  rich, 
which  are  generally  made  by  hand.  Therefore, 
the  introduction  of  improved  machinery  through- 
out the  world  results  in  an  increased  supply  of 
variable  capital.  If,  now,  variable  capital  in- 
creases more  rapidly  than  the  laboring  population, 
it  follows  that  the  value  of  labor  must  rise,  while 
the  value  of  commodities  relatively  falls,  and  that, 
when  labor  is  exchanged  for  commodities,  wages, 
as  measured  in  commodities,  must  rise. 

Marx  himself  practically  admits  this  when  he 


MACHINERY  51 

says,  "In  proportion  as  capitalistic  production 
is  developed  in  a  country,  in  the  same  proportion 
does  the  natural  intensity  and  productivity  of 
labor  there  rise  above  the  international  level; 
therefore,  nominal  wages  will  be  higher,  but  not 
necessarily  real  wages.7'  Now  it  is  clear  that  real 
wages  must  also  rise,  since  the  price  of  commodi- 
ties has  gone  down.  It  is  not  hard  to  show  that 
this  is  what  has  taken  place  in  England,  Germany, 
the  United  States,  and  all  progressive  capitalistic 
countries,  while  stagnation  and  poverty  charac- 
terize unprogressive  countries,  like  China  and 
Russia,  in  so  far  as  they  adhere  to  production  by 
hand,  and  other  oldfashioned  and  unproductive 
methods. 

This  is  so  well  understood  in  England  at  the 
present  time  that,  as  the  Webbs  say,  "it  is  not  the 
individual  capitalist,  but  the  Trade  Union,  which 
most  strenuously  insists  on  having  the  very  latest 
improvements  in  machinery."  Similarly,  Levas- 
seur  says,  "Machinery  increases  the  demand  for 
labor  by  stimulating  and  increasing  production; 
the  increased  demand  may  occur  in  the  industry 
in  which  the  machinery  is  introduced,  or  it  may 
arise  from  the  creation  of  new  industries,  but  no- 
where is  there  so  much  money  paid  in  wages  as 
where  machinery  is  common." 

2.  Labor-saving  machinery  is  labor-displacing, 
but  only  for  a  time.  As  a  rule,  when  improved 


52  ORTHODOX  SOCIALISM 

machinery  is  introduced  in  a  given  industry,  such 
an  expansion  of  the  business  results  that  presently 
more  workers  are  employed  than  there  were  before. 
Besides,  new  industries  are  created,  which  give 
employment  to  many  of  those  originally  displaced, 
as  well  as  to  the  young  workers  yearly  maturing 
from  the  constantly  increasing  population.  Thus 
in  the  year  1820  there  were  about  111,000  opera- 
tives employed  in  cotton-spinning  mills  in  Eng- 
land, and  in  the  year  1880  there  were  240,000 
operatives  thus  employed.  In  1880  there  were  in 
the  United  States  3,800,000  persons  engaged  in 
manufacturing  and  mechanical  pursuits,  and  in  the 
year  1900  there  were  7,100,000  persons  so  engaged. 
In  1880  there  were  72,800  printers,  lithographers, 
and  pressmen  in  the  United  States,  and  in  1900 
they  numbered  155,200,  in  spite  of  the  introduction 
of  the  linotype  and  other  labor-saving  machines. 
It  is  often  said  that  trusts,  by  their  improved 
methods,  have  displaced  thousands  of  commercial 
travelers,  and  yet  the  United  States  Census  shows 
that  there  were  58,700  commercial  travelers  in 
1890,  and  93,000  in  1900,  an  increase  of  60  per  cent., 
while  the  working  population  of  the  country  in- 
creased by  only  28  per  cent. 

By  statistics  such  as  these  it  can  be  shown  that 
improvements  in  machinery  and  methods,  instead 
of  creating  a  vast  army  of  unemployed  or  half- 
employed  workers,  really  make  an  increased  de- 


MACHINERY  53 

mand  for  workers  in  practically  all  the  old  occupa- 
tions, while  a  further  demand  is  created  by  the  new 
industries  that  spring  up  on  every  side. 

No  doubt  there  has  been  great  hardship  con- 
nected with  the  destruction  of  handicrafts  by 
machine  methods,  but  such  revolutionary  changes 
are  neither  so  frequent  nor  so  important  as  they 
were  at  the  beginning  of  the  nineteenth  century. 
Besides,  even  then  much  of  the  misery  that  the 
hand  workers  of  England  suffered  might  have 
been  prevented  had  they  known  how  to  adapt 
themselves  to  the  new  conditions,  as  organized 
workers  are  generally  able  to  do.  While  in  certain 
districts  hand-loom  weavers  were  starving,  in 
other  places  there  was  a  growing  demand  for 
workers  in  the  new  cotton  and  woolen  factories, 
particularly  in  the  north  and  west  of  England. 
The  Webbs  go  so  far  as  to  say :  "  The  really  cruel 
stages  of  all  this  suffering  are  needless.  We  have 
failed  to  discover  a  single  instance  of  supersession 
by  machinery  in  which  it  would  not  have  been  pos- 
sible for  the  superseded  handicraft  at  least  to  have 
died  a  painless  death.  There  are  industries  which 
have  been  changed  by  machinery  as  thoroughly  as 
weaving,  but  in  which,  owing  to  the  enforcement  of 
a  different  policy  by  the  Trade  Unions  concerned, 
the  hand-workers  have  not  only  survived,  but  are 
to-day  busier,  more  highly  paid,  and  more  skillful, 
than  ever  they  were  before." 


64  ORTHODOX  SOCIALISM 

Nor  can  it  be  shown  that  employment  is  more 
irregular  than  formerly.  During  the  Middle  Ages 
all  classes  of  society  were  dependent  upon  the  crops, 
which  depended  upon  the  weather,  than  which 
nothing  could  be  more  variable  and  irregular. 
Famines  were  frequent,  so  that  not  only  was  there 
often  stagnation  of  business  and  scarcity  of  em- 
ployment, but  myriads  of  people  died  of  starvation 
and  pestilence.  In  these  days  of  improved  trans- 
portation, when  the  whole  world  produces  for  a 
world  market^  famines  are  almost  unknown,  except 
in  non-capitalistic  countries,  like  Russia,  China,  and 
India,  and  most  of  the  workers  in  the  industrial 
army  are  employed  most  of  the  time,  while  practi- 
cally all  of  the  unemployed,  the  unemployable 
excepted,  are  unemployed  only  a  small  part  of  the 
time. 

The  fifteenth  century  has  been  called  by  Rogers 
"the  golden  age  of  the  English  laborer,"  but  Cun- 
ningham, a  more  reliable  authority,  says:  "In 
so  far  as  regularity  of  employment  and  short  hours 
are  a  test  of  the  well-being  of  the  workman,  the 
fifteenth-century  day-laborer  was  badly  off,  and 
the  masses  of  the  population  were  not  only  poor, 
but  also  miserable." 

Similar  conditions  existed  at  the  beginning  of  the 
seventeenth  century.  In  the  year  1615  a  census 
was  taken  of  the  town  of  Sheffield,  showing  that, 
out  of  a  population  of  2207,  725  people  were  not 


MACHINERY  55 

able  to  live  without  the  charity  of  their  neighbors, 
while  60  per  cent,  of  the  remainder  were  so  poor 
that  "a  fortnight's  sickness  would  drive  them  to 
beggary."  In  the  year  1688  it  was  calculated  by 
Gregory  King  that  out  of  England's  total  popula- 
tion of  5,500,000,  about  a  fourth  were  more  or 
less  dependent  upon  parochial  relief.  Speaking  of 
the  condition  of  affairs  in  England  on  the  eve  of  the 
Industrial  Revolution,  Cunningham  says :  "  There 
seems  to  be  abundant  evidence  that  the  artisan  of 
a  hundred  years  ago  was  less  regular  in  his  work, 
and  less  steady  in  character,  than  the  skilled  arti- 
san of  the  present  day.  The  first  introduction  of 
machinery  was  accompanied  by  many  evils;  but 
in  so  far  as  it  tended  toward  regular  habits  of  daily 
work  it  has  been  eventually  beneficial." 

As  Marx  himself  says,  capitalists  desire  to  have 
their  capital  constantly  employed.  Capital  seeks 
labor,  just  as  labor  seeks  capital,  and  the  fact  that 
they  do  not  always  find  each  other  must  be  due  to 
imperfect  organization  of  industry  and  imperfect 
foresight  with  regard  to  future  industrial  conditions. 
As  production  becomes  more  scientific  and  organi- 
zation more  perfect,  there  will  doubtless  be  less 
idle  capital  and  fewer  idle  workers,  and  improve- 
ments in  machinery  and  methods  will  be  intro- 
duced without  the  losses  and  distress  that  so  often 
accompany  them  at  the  present  time. 

3.  What   Marx  says  about  hours  of  labor  is 


56  ORTHODOX  SOCIALISM 

quite  contrary  to  fact.  The  effect  of  machinery 
is  to  reduce  the  hours  of  labor,  and  there  is  a  grow- 
ing tendency  among  employers  to  concede  to  the 
demand  of  the  trade  unions  for  the  ideal  eight- 
hour  day.  It  is  frequently  unprofitable  to  run 
machinery  night  and  day,  but  in  any  case  it  is 
usually  better  to  work  shifts  than  to  prolong  hours. 
A  man,  week  in  and  week  out,  can  do  more  in  ten 
hours  than  he  can  in  twelve  or  fifteen,  and  in  many 
industries,  as  Rae  has  shown,  he  can  do  as  much  in 
eight  hours  as  he  can  in  ten. 

Short  hours  and  the  piece-work  system  doubtless 
secure  greater  intensity  of  work,  which  is  a  good 
thing  for  both  employer  and  worker,  since  it  in- 
creases the  per  capita  product  of  industry  and 
gives  to  the  efficient  workman  the  reward  due  to 
his  superior  diligence  and  skill.  In  fact,  the  piece- 
work system  is  the  method  by  which  the  workers 
obtain  a  large  part  of  the  surplus  gain  resulting  from 
the  use  of  improved  machinery.  To  quote  again 
Sydney  and  Beatrice  Webb,  themselves  ardent  and 
enlightened  socialists,  "The  unions  would  never 
dream  of  suggesting  the  substitution  of  fixed-time 
rates  of  wages,  and  they  agree,  without  demur,  to 
a  Piecework  List  which,  definitely  fixed  in  advance, 
completely  secures  to  the  workmen  these  progres- 
sively increasing  earnings." 

4.  The  narrowing  influence  of  machinery  has 
been  greatly  exaggerated.  A  higher  degree  of 


MACHINERY  57 

intelligence  is  required  to  operate  complicated 
machinery  than  to  work  with  simple  tools. 
The  locomotive  engineer  is  a  broader  man  than  the 
cab  driver,  and  the  farmer  who  runs  a  mowing 
machine  is  more  intelligent  than  his  predecessor 
who  cut  hay  with  a  scythe.  The  specialist  may 
have  a  small  task  to  perform,  but  he  is  usually  a 
good  workman  in  several  other  lines,  and  often  has 
a  general  mechanical  training  as  well.  Besides, 
the  life  of  a  worker  in  a  great  factory  is  in  several 
respects  broader  than  that  of  the  old-fashioned 
artisan  in  his  little  shop.  Also,  the  modern  work- 
man has  the  broadening  influence  of  the  public 
school,  the  newspaper,  the  library,  the  trade  union, 
the  lodge,  the  institutional  church,  and  the  athletic 
club,  so  that  both  mentally  and  physically  he  is, 
or  may  be,  the  superior  of  the  handicraftsman 
of  former  times. 

It  is  frequently  difficult  for  a  specialist  to  find 
work  in  his  own  particular  line;  but  modern 
industry  is  conducted  on  so  large  a  scale  that  there 
is  usually  urgent  demand  for  skilled  specialists 
of  every  kind.  Then,  too,  the  specialist  can 
generally  find  work  in  fields  similar  to  his  own, 
while  waiting  for  the  position  exactly  suited  to  his 
ability  and  training. 

5.  Women  and  children,  while  they  may  dis- 
place men  in  certain  fields  of  work,  can  never  dis- 
place them  from  the  industrial  army  so  long  as 


58  ORTHODOX  SOCIALISM 

most  occupations  demand  strength  and  endurance 
and  other  qualities  which  men  possess  in  a  pre- 
eminent degree.  Machinery  has  increased  the  de- 
mand for  men,  while  at  the  same  time  making 
places  for  women,  with  the  result  that  the  total 
product  of  industry  has  been  greatly  increased. 
Wages  are  paid  out  of  the  product  of  industry. 
Women,  therefore,  earn  what  they  receive,  and  the 
fact  that  they  are  producers  of  wealth  does  not 
dimmish  the  share  received  by  men. 

In  the  year  1880  the  number  of  females  en- 
gaged in  gainful  occupations  of  the  United  States 
was  2,647,157,  while  in  1900  they  numbered 
5,319,912.  If  these  women  could  not  earn  their 
own  living,  they  would  be  a  burden  upon  their 
male  relatives,  or  upon  society  at  large,  and  the 
nation's  income  would  be  reduced  by  the  amount  of 
the  commodities  produced  and  the  services  ren- 
dered by  them.  That  men  have  not  been  displaced 
by  the  increased  employment  of  women  is  shown 
by  the  fact  that  in  1900  there  were  23,754,205 
males  engaged  in  gainful  occupations  as  against 
14,744,942  in  the  year  1880.  That  the  wages  of 
men  have  not  been  reduced  by  the  employment  of 
women  is  shown  by  the  considerable  rise  in  real 
wages  that  took  place  during  the  same  period  of 
twenty  years. 

The  theory  that  the  income  of  a  family  is  no 
greater  when  several  members  work  than  when 


MACHINERY  59 

the  burden  of  their  support  falls  on  the  man  alone 
is  a  modification  of  the  Malthusian  doctrine,  and 
quite  contrary  to  experience  and  to  common  sense, 
except  possibly  in  certain  restricted  localities,  or 
in  certain  Asiatic  countries,  where  every  ameliora- 
tion of  the  laborer's  lot  results  only  in  early  mar- 
riages and  increased  population. 

6.  Domestic  servants  are  relatively  declining  in 
numbers,  while  their  wages  are  rapidly  rising,  as 
every  employer  of  that  kind  of  labor  knows  to  his 
cost.    From  1890  to  1900  the  number  of  "servants 
and  waiters"  in  the  United  States  increased  by  only 
7  per  cent.,  while  the  working  population  in  the 
same  time  increased  by  28  per  cent.    As  for  clergy- 
men,   teachers,    artists,  and    other    people    who 
render  professional  and  personal  services,  they  are 
productive  as  much  as  any  laborers,  even  though 
they  may  not   directly   create   material  wealth. 
Also,  they  serve  the  laboring  class  more  and  more, 
for  the  increased  productivity  of  modern  industry  / 
has  made  it  possible  for  the  poorest  to  enjoy  luxu-/ 
ries  unknown  to  the  working  men  of  previous- 
generations. 

7.  The  socialistic  theory  that  industrial  crises 
are  caused  chiefly  by  the  production  of  commodi- 
ties which  the  laboring  class  are  unable  to  buy, 
has  been  often  refuted  and  will  be  discussed  again 
in  the  next  chapter. 

6.  It  would  be  absurd  to  deny  that  there  are 


60  ORTHODOX  SOCIALISM 

evils  connected  with  the  private  ownership  of 
capital,  but  it  is  equally  absurd  to  say  that  these 
evils  can  neither  be  removed  nor  mitigated  without 
the  overthrow  of  capitalism  and  the  establishment 
of  industrial  collectivism.  Socialists  habitually 
magnify  the  well-being  of  the  laborers  of  former 
times,  and  the  misery  of  the  workers  of  to-day; 
whereas  the  laboring  class  of  the  present  time  are 
more  prosperous,  more  intelligent,  and  more  in- 
dependent than  the  laborers  of  any  former  time. 
Their  future  under  capitalism  is  not  dark,  but 
bright  with  the  hope  of  better  things.  While 
this  is  the  case  those  who  believe  in  the  efficiency 
of  private  enterprise,  and  perceive  the  inefficiency 
of  public  undertakings  of  almost  every  kind,  may 
well  fear  to  advocate  the  socialization  of  industry, 
and  earnestly  advise  that  we  "rather  bear  those 
ills  we  have,  than  fly  to  others  that  we  know 
not  of." 


CHAPTER  VI 

INDUSTRIAL  CRISES 

SOCIALISTS  are  not  agreed  concerning  the  causes 
of  industrial  crises,  but  the  most  popular  theory 
among  them  is  that  of  Sismondi  and  Rodbertus, 
which  states  that  crises  are  due  to  the  increasing 
productiveness  of  modern  industry,  combined  with 
a  relative  decline  in  the  purchasing  power  of 
the  working  class.  Machinery  and  modern  in- 
dustrial methods  have  caused  a  vast  increase  in 
the  production  of  commodities  which  the  mass  of 
the  people  cannot  buy,  because  their  wages  are 
kept  down  to  the  level  of  a  bare  subsistence.  In 
the  words  of  Rodbertus,  "The  productiveness 
of  labor  has  increased  and  continues  to  increase, 
while  the  quantitative  sum  of  wages  has  at  best 
not  increased  in  like  proportion,  has  perhaps 
remained  stationary  or  even  fallen."  Goods  are 
produced  for  which  there  is  no  demand,  and  pres- 
ently there  is  a4  glut  or  surplus,  culminating  about 
once  in  ten  years  in  a  crisis  or  panic,  followed  by 
a  period  of  depression,  then  by  a  period  of  pros- 
perity leading  up  to  another  crisis  more  disastrous 
than  the  former,  and  thus  decade  after  decade 

61 


62  ORTHODOX  SOCIALISM 

capitalism  suffers  from  periodic  attacks  of  an  in- 
curable disease. 

Rodbertus  held  that  crises  could  be  abolished  by 
giving  to  the  laboring  man  the  full  product  of  his 
industry,  so  that  consumption  might  keep  pace 
with  production,  demand  with  supply,  and  said 
that  unless  society  should  wake  up  to  the  necessity 
of  securing  this  ideal  distribution  of  wealth  "his- 
tory will  indeed  have  to  swing  the  lash  of  revolu- 
tion over  her  again." 

Marxian  socialists  hold  that  capitalism  can  never 
cure  its  own  diseases  and  that  crises  will  increase 
in  frequency  and  violence  until  the  final  collapse 
of  the  decaying  system  of  which  they  form  a  part. 
Engels  says:  "The  mode  of  production  rises 
in  rebelling  against  the  form  of  exchange.  The 
bourgeoisie  are  convicted  of  incapacity  further  to 
manage  their  own  productive  forces.  The  pro- 
letariat seizes  political  power  and  turns  the  means 
of  production  into  State  property." 

Engels,  however,  did  not  accept  the  theory  of 
Rodbertus,  and  frequently  attacked  it,  although 
he  appears  to  consider  overproduction  as  the 
chief  cause  of  industrial  crises.  "The  extension 
of  the  markets,"  he  says,  "cannot  keep  pace  with 
the  extension  of  production."  He  also  lays  undue 
stress  upon  the  ten-year  period  which  is  not  an 
essential  feature  of  the  theory. 

The  position  of  Marx  in  this  regard  is  somewhat 


INDUSTRIAL   CRISES  63 

doubtful.  In  one  place  he  says,  "The  funda- 
mental cause  of  all  industrial  crises  is  the  poverty 
of  the  masses  and  their  inability  to  consume  the 
ever  increasing  mass  of  the  products  of  capitalism." 
In  another,  and  later  passage  he  says,  "It  is 
pure  tautology  to  say  that  crises  arise  out  of  the 
lack  of  purchasing  power  of  the  consumers." 

More  recently  socialists  have  called  attention  to 
foreign  commerce  as  making  an  outlet  for  the  sur- 
plus products  of  capitalistic  countries.  In  this 
way,  they  say,  the  downfall  of  capitalism  will  be 
postponed  until  the  markets  of  Russia,  South 
America,  Africa,  China,  and  other  backward 
countries  are  as  fully  exploited  as  those  of  western 
Europe  and  the  United  States.  Then  there  will 
be  for  capitalism  no  more  worlds  to  conquer,  no 
other  outlet  for  surplus  products,  which  will 
quickly  accumulate  until  there  shall  be  in  every 
line  an  enormous  overproduction,  a  vast  supply 
of  unsalable  goods,  when  the  most  fearful  crisis  in 
history  will  occur,  involving  the  utter  collapse  of 
capitalism,  and  clearing  the  way  for  the  establish- 
ment of  international  collectivism. 

In  criticism  of  this  theory  it  may  be  said  that 
while  overproduction  in  many  lines,  though  not 
hi  all,  is  a  characteristic  feature  of  industrial 
crises,  the  cause  of  it  is  not  the  poverty  of  the 
laboring  class,  but  a  series  of  mistakes  in  produc- 
tion, in  the  adjustment  of  supply  to  demand,  which 


64  ORTHODOX  SOCIALISM 

would  occur  as  frequently  as  now  if  the  wealth  of 
the  world  were  equally  distributed  among  all  its 
inhabitants. 

Moreover,  Rodbertus  is  quite  mistaken  when 
he  says,  "The  laboring  classes  are  excluded  from 
all  increase  of  the  national  wealth,  and,  in  opposi- 
tion to  the  progressively  growing  income  of  the 
other  classes,  at  best  only  maintain  their  former 
income."  In  every  progressive  country  the  work- 
ing class  is  not  only  growing  in  numbers,  so  that 
their  total  wages  are  increasing,  but  their  average 
wages  are  increasing  as  well,  and  their  ability  to 
buy  and  consume  the  necessaries  and  luxuries  of 
life  is  becoming  greater  year  by  year.  The  vast 
productive  power  of  machinery  is  largely  for  their 
benefit,  for,  as  E.  D.  Jones  says,  quoting  another 
authority,  "80  per  cent,  of  the  machine-made  goods 
of  the  world  are  consumed  by  the  laboring  class." 

But  if  we  assume,  with  Rodbertus,  that  the  pro- 
ductiveness of  labor  increases  faster  than  the  sum 
ofj  wages,  then,  if  capitalists  go  on  producing  goods 
for  the  laboring  class,  one  of  two  things  must  hap- 
pen :  either  the  goods  are  not  sold,  in  which  case 
there  is  a  perpetual  overproduction,  instead  of  a 
crisis  once  in  ten  years ;  or,  they  fall  in  price  until 
the  laborers,  with  their  low  money  wages,  are  able 
to  buy  them,  by  which  process  the  real  wages  of 
the  laboring  class  are  raised  in  direct  proportion  to 
the  augmented  production  of  consumers'  goods. 


INDUSTRIAL  CRISES  65 

But  a  perpetual  overproduction  is  impossible  and 
contrary  to  experience,  so  that  the  increasing  pro- 
duction of  which  Rodbertus  speaks  causes  prices 
to  fall  and  real  wages  to  rise,  while  the  self-sacri- 
ficing capitalists  content  themselves  with  smaller 
profits  and  lower  rates  of  interest. 

Again,  if  we  suppose,  for  sake  of  argument,  that 
the  condition  of  the  laboring  class  is  utterly  hope- 
less, so  that  their  purchasing  power  can  in  no  way 
be  increased,  is  it  not  absurd  to  suppose  that  capi- 
talists will  be  so  stupid  as  to  go  on  producing,  year 
after  year,  commodities  for  which  there  is  no  de- 
mand? Will  they  not  rather,  in  view  of  the 
stationary  demand  for  the  necessaries  of  life,  the 
things  consumed  by  the  laboring  class,  produce 
luxuries  for  their  own  class,  whose  purchasing  power 
is  unlimited,  or  limited  only  by  their  power  to 
produce  ? 

This,  as  a  matter  of  fact,  is  what  producers  do. 
When  demand  for  any  class  of  goods  is  active, 
they  produce  goods  of  that  class;  when  demand 
in  this  line  falls  off,  and  profits  are  too  greatly  re- 
duced, producers  withdraw,  if  they  can,  from  un- 
profitable production,  and  create  goods  for  which 
there  is  a  more  active  demand,  and  which  can  be 
sold  at  a  greater  profit.  The  fact,  if  it  is  a  fact, 
that  the  working  class  is  poor  and  growing  poorer, 
is  not  the  cause  of  over-production;  it  operates 
rather  to  deter  and  restrict  production,  and  to 


66  ORTHODOX  SOCIALISM 

guide  it  in  safer  and  more  profitable  direc- 
tions. 

The  force  of  this  criticism  cannot  be  evaded  by 
saying,  as  many  socialists  do,  that  the  exportation 
of  surplus  products  to  foreign  lands  is  the  only  thing 
that  prevents  chronic  overproduction  and  crisis 
in  every  capitalistic  country.  The  general  surplus 
of  unsalable  goods  of  which  they  speak  does  not 
exist.  When  goods  are  plentiful,  prices  fall  and 
presently  the  goods  are  sold,  though  perhaps  at 
prices  unsatisfactory,  and  even  ruinous,  to  the 
producer.  When  foreign  markets  are  opened  up, 
more  goods  are  produced,  and  the  so-called  surplus 
comes  into  existence.  If  there  were  no  foreign 
demand,  the  surplus  would  not  be  created,  except 
by  accident  or  as  the  result  of  miscalculation  of  the 
home  demand. 

Farmers  and  manufacturers  sell  goods  abroad 
because  it  is  profitable  to  do  so,  and  increase  their 
production  with  the  expansion  of  the  foreign  de- 
mand, but  not  at  first  for  the  sake  of  preventing 
overproduction  and  crisis  at  home.  If  the  United 
States  were  shut  out  from  all  the  markets  of  the 
world,  she  would  lose  the  profits  of  her  export  and 
import  trade,  and  would  suffer  great  hardship  for 
a  time;  but  chronic  overproduction  of  cotton, 
wheat,  cattle,  and  manufactured  goods  would  not 
be  the  permanent  result.  Production  in  certain 
lines  would  be  restricted;  in  others  it  would  be 


INDUSTRIAL   CRISES  67 

augmented,  while  the  home  market  would  expand, 
and  harmony  between  supply  and  demand  would 
be  again  restored.  The  elimination  of  the  uncer- 
tainties of  foreign  commerce  would  tend  rather  to 
prevent  than  to  create  industrial  crises,  and  the 
fall  in  prices  which  would  probably  result  would 
in  some  measure  compensate  the  laboring  man 
for  the  loss  of  his  share  in  the  profits  of  foreign 
commerce. 

As  to  the  prophecy  concerning  the  crisis  and 
collapse  of  capitalism,  which  is  to  come  when  all 
the  markets  of  the  world  are  as  fully  exploited  as 
those  of  western  Europe  and  the  United  States,  it 
may  justly  be  said  that  no  part  of  socialist  doctrine 
is  more  groundless  than  this,  nor  any  article  hi  their 
creed  more  plainly  due  to  what  psychologists  very 
aptly  call  "the  will  to  believe."  Crises,  as  Lang- 
worthy  Taylor  has  clearly  shown,  are  characteris- 
tic of  periods  of  development  and  progress  and  not 
of  times  of  conservatism  and  attainment.  While 
the  world  is  being  exploited  and  the  nations  are 
competing  with  one  another  for  the  largest  possible 
share  in  this  growing  and  profitable  trade,  periods 
of  rapid  development  are  sure  to  be  followed  by 
times  of  crisis  and  depression ;  but  when  the  period 
of  extensive  development  comes  to  an  end,  inter- 
national commerce  will  settle  down  to  the  com- 
paratively stable  and  regular  business  of  intensive 
exploitation,  without  the  enthusiasms,  risks,  and 


68  ORTHODOX  SOCIALISM 

calamities  that  characterize  the  intermittent  de- 
velopment of  new  and  promising  fields  of  in- 
dustry. 

Therefore  socialists  will  look  in  vain  for  a  world 
crisis  to  usher  in  international  communism.  World 
crises  have  occurred  in  the  past  and  will  occur 
again,  but  a  collapse  of  capitalism  because  of 
world-wide  overproduction,  such  as  many  socialists 
expect,  will,  in  all  probability,  never  occur,  and 
the  social  revolution,  if  it  is  to  come,  must  be  brought 
about  in  some  other  way.  In  fact,  the  doctrine  of 
Rodbertus  is  so  illogical  and  unsound  that  it  has 
been  abandoned  by  all  the  great  leaders  of  social- 
istic thought;  and,  but  for  its  tactical  value  in 
propaganda  work,  would  long  since  have  been  rele- 
gated to  the  limbo  of  exploded  theories. 

Frederick  Engels  comes  nearer  to  the  true 
theory  of  crises  when  he  lays  stress  upon  "  anarchy 
of  production"  as  the  characteristic  feature  of 
competitive  capitalism.  It  is  true  that,  in  the 
present  stage  of  capitalism,  production  is  carried 
on  by  individuals  without  sufficient  regard  to 
what  other  individuals  are  doing,  and  without  con- 
trol or  regulation  by  any  superior  authority.  The 
result  of  this  is  that  producers  make  mistakes,  with 
serious  consequences  to  themselves  and  others. 
If  these  mistakes  are  important  and  numerous, 
they  create  a  critical  condition,  with  many  business 
men  on  the  verge  of  bankruptcy,  and  all  striving, 


INDUSTRIAL   CRISES  69 

by  the  use  of  credit  and  every  other  possible  means, 
to  avoid  falling  into  the  abyss. 

If,  at  such  a  time  as  this,  an  important  calamity 
occurs, — a  bad  harvest,  a  war,  a  political  revolution, 
the  failure  of  one  or  more  great  banks  or  mercan- 
tile houses,  —  the  shock  is  transmitted,  as  by  a  wave 
movement,  from  one  part  of  the  business  world  to 
another,  and  the  unfortunates  who  are  trembling 
on  the  brink  are  suddenly  precipitated  into  the 
depths  of  bankruptcy  and  ruin.  These,  in  turn, 
draw  others  after  them,  because  of  the  intimate 
relations  that  exist  between  all  parts  of  the  in- 
dustrial organism,  and  in  such  a  time  of  crisis  and 
disaster  only  the  strongest  can  maintain  their 
ground  and  avoid  being  carried  to  destruction  by 
the  rising  tide  of  failure  and  liquidation. 

In  attempting  to  explain  the  causes  which  bring 
about  so  mysterious  a  condition  of  affairs,  three 
important  circumstances  should  be  noted.  In  the 
first  place,  as  Taylor  has  well  shown,  the  industrial 
system  is  in  a  constant  state  of  change,  and  it  is 
necessary  for  each  individual  to  adjust  his  business 
to  the  changing  environment  if  he  would  survive 
in  the  struggle  for  economic  existence  and  su- 
premacy. Many  individuals  find  it  impossible  to 
adapt  themselves  even  to  a  slowly  changing  en- 
vironment; but  when  the  environment  is  rapidly 
changing,  as  in  new  and  progressive  countries,  or 
in  new  and  growing  industries,  many  more  indi- 


70  ORTHODOX  SOCIALISM 

viduals,  failing  to  maintain  their  position  of  useful- 
ness and  profit,  fall  behind  in  the  race,  with  serious 
loss  to  themselves  and  everybody  connected  with 
them.  Thus  it  is  that  the  severest  crises  occur  in 
the  most  progressive  countries  and  in  the  most 
rapidly  developing  fields  of  industry. 

The  second  notable  circumstance  is  of  equal  im- 
portance with  the  first,  involving  the  accumulation 
of  small  misfortunes  until  a  great  calamity  arrives 
for  which  there  is  no  remedy.  If  each  individual 
could  quickly  and  certainly  be  punished  for  his  own 
mistakes,  so  that  he  alone  would  bear  the  evil  con- 
sequences of  them,  and  the  day  of  reckoning  were 
not  postponed,  the  industrially  unfit  would  be  elimi- 
nated one  by  one,  and  their  failures  would  cause 
a  minimum  of  disturbance  which  would  affect  but 
slightly  the  general  welfare  of  the  business  world. 

But  when  business  men  are  falling  behind  in 
the  race,  they  do  not  realize  the  fact,  or,  if  they  do, 
they  struggle  to  keep  up  with  the  rest,  postponing 
the  evil  day  as  long  as  possible.  In  this  laudable 
struggle  they  are  assisted  by  their  friends,  that  is 
to  say,  their  creditors,  whose  fortunes  are  most 
intimately  connected  with  theirs.  Thus,  by  means 
of  credit,  the  existence  of  thousands  of  the  in- 
dustrially feeble  is  maintained  from  year  to  year, 
their  failure,  always  imminent,  being  postponed 
until  they  all  fall  together  in  the  collapse  and  ruin 
of  a  great  industrial  crisis. 


INDUSTRIAL   CRISES  71 

It  is  like  the  formation  and  downfall  of  a  great 
avalanche  of  snow.  If  every  drift  of  snow  on  the 
mountain  side  could  fall  at  once  to  level  ground, 
there  would  be  no  destructive  avalanche.  But 
little  by  little  the  feathery  snows  accumulate  until 
a  great  mass  overhangs  the  valley,  when  a  strong 
wind  or  the  passing  of  a  railway  train  precipitates 
it  all  with  death  and  destruction  to  the  depths 
below.  So  it  is  with  the  wholesale  failures  that 
attend  an  industrial  crisis.  They  are  the  con- 
sequences of  the  mistakes  of  years,  accumulated 
chiefly  by  the  system  of  credit  that  prevails  in  the 
most  civilized  countries  of  the  world.  Thus  it  is 
that  crises  are  most  severe  in  those  countries  pos- 
sessing the  most  highly  developed  system  of  credit, 
and  in  those  lines  of  business  where  credit  plays 
the  most  important  part. 

In  the  third  place,  the  mistakes  which  business 
men  make,  especially  hi  times  of  prosperity  and 
progress,  and  which  tend  to  accumulate  by  virtue 
of  extensions  of  credit,  are  due  chiefly  to  the  fact 
that  it  is  difficult  or  impossible  to  look  forward 
into  the  future  with  any  degree  of  prophetic  in- 
sight. If  business  men  could  do  this,  and  had 
strength  of  will  and  elasticity  of  mind  sufficient 
to  enable  them  to  act  in  accordance  with  their 
knowledge,  they  would  make  no  mistakes;  there 
would  be  no  accumulation  of  misfortunes,  and 
neither  local,  national,  nor  world-wide  industrial 


72  ORTHODOX  SOCIALISM 

crises.  But  the  future  is  unknown,  and  business 
men  plunge  into  it  with  feelings  of  hope  and  a 
blind  disregard  of  the  activities  and  interests  of 
their  fellows,  all  going  ahead  as  fast  as  they  can 
on  the  principle  of  "Every  man  for  himself,  and 
devil  take  the  hindmost. " 

In  former  times  industrial  depressions,  somewhat 
different  from  modern  crises,  were  characterized 
by  sheer  want  of  the  necessaries  of  life,  caused  by 
famine,  pestilence,  war,  or  other  calamities  which 
could  neither  be  foreseen  nor  prevented.  In 
recent  times  crises  have  frequently  been  due  to  the 
same  or  similar  causes,  and  still  it  is  impossible  to 
foresee  events  such  as  these,  although  business 
men  can,  by  the  practice  of  economy  and  prudence, 
be  in  a  measure  prepared  for  them. 

It  is  also  impossible  accurately  to  forecast  the 
economic  development  of  the  future,  near  or 
remote,  and  many  crises  have  been  due  to  expecta- 
tions which  the  progress  of  events  has  failed  to 
realize.  The  tulip  mania  of  1634^36  in  Holland  is 
a  case  in  point,  where  a  miscalculation  of  the 
future  demand  for  these  beautiful  and  desirable 
flowers  caused  their  price  to  rise  enormously,  until 
it  was  discovered  that  a  mistake  had  been  made, 
when  a  crisis  occurred  and  the  bubble  collapsed 
like  a  house  of  cards.  Very  similar  to  this  was  the 
speculation  in  the  shares  of  the  Louisiana  Company 
in  France,  and  the  South  Sea  Company  in  England, 


INDUSTRIAL   CRISES  73 

based  upon  extravagant  hopes  of  the  future  de- 
velopment of  certain  new  countries,  a  development 
which  was  too  long  delayed,  so  that  the  companies 
could  not  fulfill  their  promises,  and  thousands  of 
deluded  shareholders  were  ruined  and  both  coun- 
tries suffered  severely  from  the  resulting  distress 
and  industrial  stagnation. 

Similar  to  this  was  the  panic  of  1837  in  the 
United  States,  brought  about  chiefly  by  specula- 
tion in  western  lands,  causing  inflated  values  which 
the  development  of  the  country,  rapid  as  it  was, 
by  no  means  justified.  Similar  also  were  the  land 
booms  of  Toronto,  Minneapolis,  Omaha,  Denver, 
and  other  new  and  growing  cities,  where  hopes  of 
progress  passed  the  bounds  of  reason,  land  values 
rose,  and  unwise  investments  were  made,  until  the 
inflated  bubbles  broke,  followed  by  years  of  de- 
pression and  struggle.  Similar,  again,  was  the 
world  crisis  of  1893,  closely  connected  with  mistaken 
estimates  of  the  future  development  of  Australia, 
Argentina,  the  United  States,  and  certain  promising 
industries  in  European  countries. 

Intimately  related  to  mistakes  such  as  these  are 
the  mistakes  of  producers,  who,  through  inexperi- 
ence or  misfortune,  allow  cost  of  production  to 
exceed  their  gross  returns.  Other  producers,  or 
promoters  associated  with  them,  cause  industrial 
companies  to  be  overcapitalized,  so  that  stock- 
holders are  disappointed  in  their  expectation  of 


74  ORTHODOX  SOCIALISM 

dividends,  and  losses  occur,  as  in  the  crisis  in  stocks 
of  the  year  1903.  Manufacturers,  bankers,  and 
other  lenders  of  goods  and  money  frequently  err 
in  extending  credit  to  business  men  whose  financial 
condition  is  not  good,  and  in  this  way  the  mistakes 
of  one  class  of  people  connect  them  with  others, 
so  that  all  must  stand  or  fall  together. 

Governments,  too,  contribute  to  financial  stabil- 
ity or  instability  by  their  close  connection  with 
banking  and  monetary  systems,  as  well  as  with  laws 
concerning  bankruptcy,  protective  tariffs,  corpora- 
tions, and  other  matters  intimately  related  to  the 
business  world,  and  in  governmental  activity, 
foresight  and  judgment  are  fully  as  important  as 
they  are  in  private  business. 

Anarchy  in  production,  then,  using  the  word  in 
a  very  broad  sense,  far  broader  than  the  sense  in 
which  Engels  used  it,  is  the  cause  of  mistakes  in 
production,  and  these  mistakes  bring  about  the 
crises  which  occur  from  time  to  time,  not  every  ten 
years,  but  often  enough  to  give  color  to  the  social- 
ists' assertion  that  they  are  the  death  struggles  of 
the  present  industrial  system. 

Would  it  not  be  more  correct  to  say  that  crises 
are  the  growing  pains  of  progress  rather  than  the 
dying  throes  of  capitalism?  Do  the  struggles  of 
the  vast  system  to  adjust  itself  to  a  new  environ- 
ment, to  shake  itself  together  after  a  time  of  uneven 
growth,  seem  like  death  struggles  at  all?  Does 


INDUSTRIAL  CRISES  75 

the  recuperative  power  displayed  seem  like  the  slow 
convalescence  of  a  dying  man?  Are  the  growth 
and  progress  that  follow  a  period  of  depression 
like  the  decrepitude  of  tottering,  age,  or  more  like 
the  awakening  of  youth  and  life  after  a  refreshing 
sleep  ? 

Without  insisting  on  any  such  biological  analo- 
gies, it  is  not  difficult  to  show  that  crises  do  not 
seriously  threaten  the  future  of  capitalism,  and 
that  in  all  probability  they  will  become  less  fre- 
quent and  less  severe  as  time  goes  on,  and  the  pro- 
cess of  evolution  eliminates  that  which  is  injurious 
to  industry  and  progress. 

If  crises,  as  Taylor  thinks,  are  the  disturbances 
which  mark  the  change  from  old  to  new  economic 
conditions,  then  they  are  the  penalty  which  society 
must  pay  for  industrial  progress,  and  the  game 
is  surely  worth  the  candle.  The  continuance  of 
progress  under  capitalism  is  a  sign  of  the  vitality 
of  capitalism  and  not  an  indication  of  its  approach- 
ing decline  and  fall.  But  is  it  likely  that  industrial 
progress  will  be  as  rapid  in  the  future  as  it  has  been 
in  the  past  ?  If  so,  and  if  no  human  foresight  and 
prudence  can  help  in  the  adjustments  that  will 
be  necessary,  crises  will  be  as  frequent  and  as  severe 
as  now,  but  the  benefits  of  progress  will  outweigh 
the  temporary  evils  of  crisis  and  depression.  If 
not,  then  business  will  become  more  stable  though 
less  progressive,  and  crises  will  be  infrequent,  and 


76  ORTHODOX  SOCIALISM 

by  no  means  disastrous,  phenomena  of  a  moder- 
ately progressive  industrial  society. 

In  all  this  there  is  nothing  to  indicate  the  col- 
lapse of  capitalism  which  socialists  expect  to  see 
just  before  the  advent  of  democratic  collectivism. 
Indeed,  from  this  standpoint  it  looks  as  though 
the  collective  organization  of  industry  would  be 
subject  to  periodic  attacks  of  the  same  disease. 
As  Taylor  puts  it,  "From  this  evil  even  the  so- 
cialistic state  could  be  free  only  on  the  hypothesis 
that  it  had  wiser  leaders  than  those  that  are  now 
found  within  the  psycho-financial  circuit,  or,  on 
the  other  more  probable  hypothesis,  that  the  social- 
istic state  did  not  advance  at  all." 

But  if  it  is  true  that  the  present  system  of  credit 
aggravates  the  evils  of  crises  by  prolonging  the 
existence  of  the  industrially  unfit  until  the  time 
of  storm  and  stress,  then  it  is  reasonable  to  hope 
that  an  improved  system  of  credit  will  do  much 
to  lessen  these  evils,  though  it  may  not  be  able  to 
prevent  crises  nor  to  remove  all  their  injurious 
effects.  Even  now  creditors  are  becoming  more 
conservative  in  lending,  and  debtors  more  cautious 
in  borrowing,  while  credit  associations  of  many 
kinds  are  a  great  help  to  individuals  in  their  efforts 
to  place  their  business  upon  a  sounder  financial 
basis.  Monetary  conditions,  too,  are  improving; 
banking  is  becoming  more  scientific;  larger  firms 
are  being  established;  more  business  is  being 


INDUSTRIAL  CRISES  77 

done  on  a  cash  basis;  and  the  tendency  is  toward 
greater  publicity  in  business  affairs.  So  that 
the  future  development  of  industry  is  likely  to 
show  more  financial  stability  and  less  of  the 
danger  that  comes  from  undue  expansion  of 
credit. 

Again,  while  it  is  true  that  many  things  cannot 
be  foretold,  it  is  also  true  that  economic  prediction 
is  becoming  more  possible,  as  economic  laws  are 
coming  to  be  better  and  more  widely  known.  It 
is  still  difficult,  though  not  impossible,  to  forecast 
the  weather,  and  crop  failures  frequently  occur, 
but  diversified  farming  and  improvements  in  trans- 
portation have  done  away  with  famines  in  all 
capitalistic  countries,  and  have  greatly  mini- 
mized the  effects  of  local  crop  failures,  so  that  the 
danger  of  crises  from  that  source  is  constantly 
becoming  less.  Besides,  farmers  as  a  class  are 
becoming  more  wealthy  and  are  able  to  buy  manu- 
factured goods  even  when  their  crops  are  small, 
so  that  a  crop  failure  is  less  of  a  disaster  to  the 
business  world  than  ever  it  was  before. 

The  evils  of  unrestricted  competition  are  be- 
coming less,  because  of  regulation  on  the  part  of 
trusts  and  syndicates  of  various  kinds,  and  in  this 
way  overproduction  is  largely  prevented  and  har- 
mony between  supply  and  demand  is  more  easily 
secured.  This  tendency  is  recognized  by  some 
socialists,  notably  Bernstein,  who  says,  "With- 


78  ORTHODOX  SOCIALISM 

out  allowing  myself  to  prophesy  concerning  the 
final  outcome  of  syndicates  and  trusts,  I  have  rec- 
ognized the  possibility  of  lessened  danger  from 
crises  because  of  adaptation  of  production  to  the 
needs  of  the  market."  A  statement  like  this  is 
quite  at  variance  with  the  view  of  T.  W.  Mills, 
who  thinks  that  the  collapse  of  capitalism  will 
come  as  the  result  of  overproduction  on  the  part 
of  a  world  trust.  The  last  thing  that  a  world  trust 
would  do  would  be  to  produce  a  mass  of  unsalable 
goods.  It  would  regulate  production  and  forever 
prevent  crises  and  industrial  collapse. 

Even  in  competitive  lines  prediction  is  becoming 
more  possible,  and  therefore  some,  at  least,  of  the 
uncertainties  of  business  are  giving  place  to  scien- 
tific production.  Unwise  speculation  in  land  and 
stocks  still  occurs,  but  investors  are  becoming 
more  cautious,  better  instructed,  and  less  ready 
to  play  the  part  of  "lambs"  in  all  speculative 
operations.  Business  men  are  quick  to  adapt 
themselves  to  changing  conditions,  adopting  new 
machinery  and  methods,  cutting  down  the  expenses 
of  production,  employing  highly  skilled  labor,  pay- 
ing good  wages,  producing  goods  that  the  market 
demands,  carrying  little  or  no  old  stock,  responsive 
to  changes  in  fashion,  careful  to  maintain  adequate 
reserve  funds,  carrying  sufficient  insurance,  and 
in  every  possible  way  trying  to  make  their  finan- 
cial condition  secure,  while  still  eager  to  obtain 


INDUSTRIAL   CRISES  79 

the  profits  that  come  from  progressive  manage- 
ment and  expanding  trade. 

Scientific  production,  or,  rather,  scientific  busi- 
ness activity,  is  becoming  more  possible.  Also  the 
industrial  mechanism,  operated  by  highly  skilled 
captains  of  industry,  is  being  run  with  less  fric- 
tion and  loss  of  energy.  Business  methods,  while 
sufficiently  conservative,  change  rapidly  with  the 
changing  environment.  Man,  the  product  of 
evolution,  appears  to  be  acquiring  control  over 
the  forces  that  produced  him.  Intelligence  be- 
comes a  factor  in  industrial  evolution,  a  factor 
that  works  toward  the  elimination  of  anarchy  and 
crisis  and  the  establishment  of  peace  and  orderly 
progress  in  the  industrial  world. 


CHAPTER   VII 

THE  ECONOMIC  -INTERPRETATION  OF  HISTORY 

WHAT  student  of  history  has  not  felt  the  need  of 
an  interpreter?  History  is  frequently  little  more 
than  a  chronicle  of  events  that  follow  one  another 
like  pictures  in  a  panorama,  operated  by  machinery 
that  we  cannot  see,  controlled  by  motives  that  we 
cannot  understand.  Karl  Marx,  with  his  economic 
interpretation,  professes  to  be  able  to  admit  us 
behind  the  scenes,  where  we  may  get  a  glimpse 
of  the  power  that  runs  the  show,  and  come  to  appre- 
hend, if  not  to  comprehend,  the  moving  principle 
of  social  evolution. 

Philosophers  of  every  age,  from  Heraclitus 
to  Hegel,  gazing  in  wonder  at  the  ceaseless 
change  and  flow  of  things,  have  sought  to 
discover  the  reality  behind  the  appearance,  to 
explain  in  some  rational  way  a  succession  of 
events  otherwise  quite  unintelligible.  But  why 
should  natural  evolution  be  intelligible  to  man? 
Evidently,  says  Hegel,  because  the  world  itself 
is  the  expression  of  that  reason  which  is  the  essence 
and  soul  of  it.  The  mind  of  man  is  the  reflection, 
or  counterpart,  of  universal  reason.  Man  is  the 
measure  of  all  things.  As  the  mind  of  man  has 

80 


ECONOMIC  INTERPRETATION   OF  HISTORY     81 

evolved,  so  has  the  world  evolved,  reason  in  both 
causes,  advancing  step  by  step  from  the  unconscious 
to  the  conscious,  from  ignorance  to  knowledge, 
from  chaos  and  war  to  universal  harmony  and 
justice. 

Logic,  with  Hegel,  is  the  universal  science,  for 
the  process  of  thought  is  the  process  of  evolution. 
Thought  advances  by  the  resolution  of  apparent 
contradictions.  We  discover  a  fact,  and  then  an- 
other fact  which  seems  to  disagree  with  the  first. 
Presently  we  see  a  principle  of  reconciliation,  and 
this  new  principle  guides  us  until  we  find  it  op- 
posed by  another,  which  again  leads  to  the  discovery 
of  a  higher  law,  and  thus  forever  knowledge  grows 
from  more  to  more.  Thesis,  antithesis,  synthesis, 
is  the  formula  of  rational  evolution  in  the  human 
mind  and  in  the  universe.  The  evolution  of  human 
society  follows  this  logical  process,  and  history, 
therefore,  can  be  a  science,  a  rational  explanation 
of  human  life  and  social  progress. 

Karl  Marx  was  a  disciple  of  Hegel  and  at  the 
same  time  an  opponent  of  his  system.  He  was  to 
Hegel  what  Aristotle  was  to  Plato,  the  material- 
istic exponent  of  an  idealistic  philosophy.  Hegel's 
views  concerning  the  ideal  development  of  society 
were  foolishness  to  Marx.  By  Hegel  reason  was 
placed  at  the  beginning  of  things ;  by  Marx  it  was 
placed  at  the  end  of  material  evolution,  reflecting 
the  world  because  it  is  the  product  of  the  world. 


82  ORTHODOX  SOCIALISM 

Thus  Marx  says:  "It  is  not  the  consciousness  of 
mankind  that  determines  its  existence,  but  its 
social  existence  that  determines  its  consciousness." 

Material  evolution,  then,  is  the  foundation  of 
social  evolution,  and  the  interpretation  of  history 
must  be  based  upon  material  and  not  ideal  prin- 
ciples. Yet,  while  Marx  rejects  the  ideal  philoso- 
phy of  Hegel,  he  adopts  as  his  fundamental  doc- 
trine the  principle  of  the  Hegelian  dialectic  which 
affirms  the  eternal  flux  of  things,  asserting  that 
every  state  of  society  is  essentially  transient  in  its 
nature,  because  it  contains  within  it  all  the  elements 
of  its  own  destruction,  contradictions  which  will 
break  it  up,  only  to  form  the  new  synthesis  of  a 
better  and  more  harmonious  condition,  until, 
Marx  would  add,  contradictions  shall  cease  in  the 
perfect  harmony  of  democratic  collectivism. 

Historians  like  Buckle  had  emphasized  the  im- 
portance of  material  environment  in  the  develop- 
ment of  society,  but  it  remained  for  Marx  to  show 
how  the  relation  of  man  to  the  production  and 
distribution  of  wealth  to  a  great  extent  deter- 
mines social,  political,  legal,  moral,  and  religious 
life.  That  man  may  live  he  must  have  the  means 
of  life,  —  food,  shelter,  and  clothing, —  and  his  most 
vital  interests  have  to  do  with  the  production  of 
these  things.  Getting  a  living  is  the  chief  concern 
of  man,  and  the  organization  of  society  is  deter- 
mined chiefly  by  economic  conditions. 


ECONOMIC  INTERPRETATION  OF  HISTORY     83 

According  to  Marx  the  economic  organization 
of  society  is  primary,  fundamental,  and  upon  it 
rests  the  entire  superstructure  of  social  life.  It  is 
true  that  there  are  motives  other  than  economic, 
-love,  hate,  fear,  pride,  ambition,  curiosity, 
respect  for  law  and  custom,  moral  sense,  religious 
feeling,  scientific  ideals,  artistic  aspiration,  —  but 
all  of  them  have  their  roots  in  economic  conditions. 
Engels  says:  "The  political,  legal,  philosophical, 
religious,  literary,  and  artistic  evolution  rests 
upon  the  economic.  But  they  all  react  upon  one 
another,  and  upon  the  economic  basis." 

Much  light  is  thrown  upon  the  pages  of  history 
by  the  principle  of  economic  interpretation.  As 
Morgan  has  shown,  the  life  of  primitive  man  was 
largely  determined  by  certain  economic  factors, 
-  the  discovery  of  fire,  the  invention  of  pottery, 
the  domestication  of  animals,  the  use  of  tools 
and  weapons  of  various  kinds.  Historians  speak 
of  the  ages  of  stone,  bronze,  and  iron,  and  it  is 
certain  that  the  growth  of  civilization  was  in 
great  measure  dependent  upon  the  use  of  these 
materials.  Historians  also  speak  of  the  hunting 
and  fishing,  the  pastoral,  agricultural,  commercial, 
and  industrial  stages  of  civilization,  and  it  is 
clear  that  they  are  to  be  regarded  as  primary  fea- 
tures of  evolution. 

When  people  lived  by  hunting  and  fishing,  they 
wandered  about  in  small  bands,  under  the  leader- 


84  ORTHODOX  SOCIALISM 

ship  of  chiefs  whose  authority  was  very  slight. 
They  dwelt  in  wigwams  or  other  temporary  struc- 
tures, and  their  family  life  was  very  primitive  in  its 
character.  They  carried  on  ferocious  wars  for 
the  possession  of  hunting  grounds,  usually  slaugh- 
tering prisoners  and  destroying  their  habitations. 
When  game  was  scarce,  they  migrated  to  other 
regions,  or  died  of  starvation  and  disease.  Their 
moral  and  religious  life  was  determined  by  the 
necessities  of  their  economic  environment. 

Pastoral  tribes  represent  a  higher  stage  in  human 
development,  but  none  the  less  is  their  life  deter- 
mined by  the  nature  of  their  occupation.  They 
are  more  populous  than  the  former  class,  because 
they  have  more  food  to  eat.  They  are  migratory, 
because  they  must  find  pasture  for  their  cattle. 
They  go  in  large  bands  under  chiefs  who  have  a 
considerable  degree  of  authority  over  them.  They 
often  spare  their  captives,  for  they  can  use  them 
as  slaves.  They  worship  the  heavenly  bodies,  for 
they  generally  live  in  the  open  plain. 

Agricultural  people,  on  the  other  hand,  are  less 
migratory,  for  they  have  settled  down  upon  the 
land.  They  build  houses  and  fenced  cities;  they 
own  land  and  slaves  and  desire  the  blessings  of 
peace.  They  are  no  longer  satisfied  with  tribal 
government,  but,  like  the  ancient  Israelites,  they 
demand  a  king,  and  are  willing  to  pay  taxes  and 
maintain  a  standing  army.  They  are  strongly 


ECONOMIC  INTERPRETATION   OF  HISTORY     85 

bound  by  custom  and  tradition,  develop  a  com- 
plicated religious  system,  and  in  time  acquire  a 
knowledge  of  arts  and  sciences,  accumulating 
civilization  as  they  accumulate  property. 

Without  further  discussing  the  salient  charac- 
teristics of  the  various  economic  stages,  it  may  be 
well  to  give  a  few  illustrations  of  the  application 
of  economic  interpretation  to  the  explanation  of 
the  facts  of  history. 

The  migrations  of  ancient  times,  it  is  said,  were 
chiefly  for  the  sake  of  acquiring  hunting  grounds, 
pasturage  for  cattle,  lands,  houses,  slaves,  and  plun- 
der of  every  kind.  The  decline  of  the  Roman 
Empire  was  due  to  excessive  taxation  and  the 
destruction  of  the  best  citizens  in  wars  of  aggran- 
dizement. Slavery  was  abolished  because  the 
masters  found  it  more  profitable  to  have  their 
land  cultivated  by  serfs  and  rent-paying  tenants. 
Serfs  were  liberated  because  their  masters  could 
derive  more  profit  from  hiring  free  labor  at  star- 
vation wages.  The  Crusades  were  caused  by  the 
interference  of  the  Turks  with  Venetian  and  Geno- 
ese traders.  The  towns  of  the  Middle  Ages  acquired 
the  right  to  tax  themselves,  obtained  charters,  and 
so  originated  constitutional  liberty  and  represen- 
tative government. 

The  constitution  of  England  was  the  result  of 
resistance  to  taxation  on  the  part  of  the  barons  and 
the  free  cities.  The  Renaissance  was  the  economic 


86  ORTHODOX  SOCIALISM 

awakening  of  Europe  from  the  slumbers  of  the 
Middle  Ages.  The  Reformation  was  due  to  the 
economic  tyranny  of  the  Church  hi  the  exaction  of 
tithes  and  payments  for  indulgences.  The  Span- 
ish came  to  America  in  search  of  gold,  as  did  also 
the  French  and  the  English.  The  American  Revo- 
lution was  fought  to  secure  freedom  from  taxation 
and  liberty  of  trade.  The  French  Revolution  was 
the  rebellion  of  the  people  against  the  economic 
tyranny  of  the  landed  aristocracy. 

The  War  of  1812  was  fought  to  secure  freedom 
in  neutral  trade.  The  invention  of  the  cotton 
gin  fastened  slavery  upon  the  South  for  more  than 
two  generations.  The  people  of  the  North  ob- 
jected to  slavery  because  it  was  not  profitable 
there.  The  protective  tariff  and  the  slavery  ques- 
tion were  the  chief  causes  of  secession  sentiment 
in  the  South.  The  foreign  policy  of  all  modern 
nations  is  governed  chiefly  by  considerations  of 
commerce,  and  every  one  of  them  is,  in  the  words 
of  Napoleon,  "a  nation  of  shopkeepers." 

The  economic  interpretation  of  history,  then, 
is  a  philosophy  of  history,  and  claims  to  be  a  scien- 
tific explanation  of  the  evolution  of  human  society. 
Because  of  it  there  is  some  reason  for  calling  the 
Marxian  system  "  scientific,"  as  distinguished  from 
the  "utopian"  socialism  of  earlier  writers.  Karl 
Marx  saw  in  social  evolution  a  series  of  class  strug- 
gles, whereby  slavery  gave  place  to  feudalism 


UNIVERSITY   | 

y 

—  >•****' 

ECONOMIC  INTERPRETATION  OF  HISTORY     87 

and  feudalism  to  capitalism.  Arguing  from  the 
history  of  the  past,  he  asserted  that  the  system  of 
capitalism  would,  in  time,  and  before  long,  be 
broken  up  by  the  class  struggles  of  capitalists  and 
laborers,  so  that  it  would  be  "the  last  of  the  an- 
tagonistic forms  of  social  production,"  and  be  suc- 
ceeded by  a  permanent  yet  progressive  condition, 
when  class  wars  should  cease,  because  the  working 
class  alone  should  rule  the  earth.  Socialism, 
therefore,  claims  to  be  a  scientific  interpretation 
of  past  events,  and  a  scientific  prophecy  of  indus- 
trial and  social  changes  that  are  to  come. 

The  Marxian  conception  of  history  is  commonly 
called  historical  materialism,  but  in  its  essential 
features  it  is  not  at  all  materialistic.  Its  basic 
assumption  is  the  philosophical  thesis  that  the 
world  is  intelligible  to  man,  and  that,  in  its  evolu- 
tion, it  follows  the  law  of  the  progress  of  knowledge 
by  the  reconciliation  of  apparent  contradictions. 
The  Marxian  view  of  history  should  be  called  psy- 
chological rather  than  materialistic,  for  it  is  based 
upon  a  study  of  the  motives  which  actuate  human 
conduct;  which,  though  economic  in  their  nature, 
are  no  more  materialistic  than  artistic,  ethical,  re- 
ligious, or  other  motives  of  a  higher  character. 
Consciousness  determines  environment  and  is  de- 
termined by  it,  and  it  is  a  misuse  of  words  to  call 
an  evolution  such  as  this  materialistic. 

No  sociologist  can  quarrel  with  the  Hegelian  and 


88  ORTHODOX  SOCIALISM 

Marxian  conception  of  social  life  as  a  process  of 
development,  dynamic  rather  than  static  in  its 
character.  Society  is  alive,  and  must  grow  and 
change,  at  least  during  the  period  of  its  youth  and 
vigor.  Nor  can  any  sociologist  object  to  Marx 
when  he  both  justifies  and  condemns  the  present 
state  of  society,  affirming  and  denying  its  rational- 
ity at  one  and  the  same  time.  Whatever  is,  is  right, 
and  whatever  is,  is  wrong.  This  is  a  typical  Hegel- 
ian contradiction  or  antinomy,  which  can  be  re- 
solved by  affirming  the  law  of  social  evolution  and 
eternal  change.  The  present  state  of  society  is 
right  because  it  could  not  be  otherwise ;  it  is  wrong 
because  it  can,  and  must,  be  improved  as  time  goes 
on.  Statically  speaking,  the  world  is  what  it  is; 
dynamically,  it  is  not  what  it  may  be  and  will 
become. 

But,  in  laying  so  much  stress  upon  economic 
motives,  Marx  lays  himself  open  to  the  charge  of 
taking  a  narrow  view  of  life,  of  trying  to  explain 
the  whole  of  life  by  what  is,  at  most,  only  a  part 
of  it.  "Is  not  the  life  more  than  meat,  and  the 
body  than  raiment?"  The  instinct  of  self-preser- 
vation is  more  fundamental  than  the  economic 
instinct.  Men  desire  economic  goods  for  the  sake 
of  life,  not  life  for  the  sake  of  the  means  of  life. 

The  reproductive  instinct,  too,  is  not  economic 
in  its  character,  and  whole  masses  of  men,  perhaps 
the  majority  of  mankind,  sacrifice  their  economic 


ECONOMIC  INTERPRETATION  OF  HISTORY     89 

welfare  to  the  imperative  needs  of  the  sexual  nature. 
The  religious  instinct  cannot  be  traced  to  an  eco- 
nomic origin,  and  frequently,  in  the  history  of  in- 
dividuals and  communities,  it  has  determined  life 
and  action  in  opposition  to  obvious  economic 
interests. 

Minor  impulses,  too,  exist  side  by  side  with  the 
primary  instincts,  and  have  much  to  do  with  the 
determination  of  human  conduct.  Such  are  the 
fighting  instinct,  the  instinct  of  play,  the  love  of 
ornament,  the  love  of  power,  ambition,  pride,  self- 
esteem,  —  motives  very  strong  in  most  individuals 
and  not  without  their  influence  upon  the  evolu- 
tion of  society.  Custom,  too,  is  a  conservative 
force  whose  power  the  revolutionary  socialist 
commonly  underestimates.  Life  is  highly  com- 
plex, both  in  individuals  and  in  society,  and 
any  attempt  to  explain  it  by  a  monistic  principle 
must  give  a  one-sided,  and  partial,  view  of  human 
history. 

The  very  illustrations  which  the  Marxians  give 
may  be  used  to  show  that  their  main  thesis,  while 
containing  a  large  measure  of  truth,  must  be 
greatly  modified  before  it  can  serve  as  a  satisfactory 
explanation  of  all  the  phases  of  human  develop- 
ment. Migrations,  like  those  of  the  Germans  who 
invaded  the  Roman  Empire,  were  perhaps  in- 
spired as  much  by  the  love  of  adventure  and  mili- 
tary glory  as  by  the  desire  to  plunder  the  rich 


90  ORTHODOX  SOCIALISM 

treasures  of  the  civilized  world.  The  decline  of 
Rome  may  have  been  due  to  enervating  vices  and 
the  decay  of  the  ancient  religious  and  moral 
standards.  The  Crusades  cannot  be  explained 
without  taking  into  account  the  religious  enthusiasm 
that  inspired  the  people  of  those  days ;  nor  can  we 
understand  the  Reformation  without  an  apprecia- 
tion of  the  power  of  religious  motives. 

The  Renaissance  was  principally  an  artistic  and 
intellectual  awakening,  and  the  economic  benefits 
of  it  were  effects,  rather  than  causes,  of  the  new 
spirit  that  animated  the  western  world.  Liberty 
in  England  and  America  was  the  outcome  of  the 
independent  spirit  of  the  Anglo-Saxon  race,  and 
questions  of  taxation  were  often  mere  pretexts 
for  self-assertion  and  rebellion.  The  conquests 
of  Alexander,  Hannibal,  Caesar,  and  Napoleon  were 
inspired  primarily  by  love  of  adventure  and 
power,  and  secondarily  by  the  desire  for  plunder 
and  commercial  aggrandizement.  Africa  was  first 
explored  by  adventurers  and  missionaries,  after- 
ward by  merchants  and  land-grabbers. 

The  history  of  religion  cannot  be  explained  by 
economic  principles.  The  progress  of  science,  art, 
and  literature  proceeds  chiefly  from  impulses 
scientific,  artistic,  and  literary.  Humanitarianism 
is  non-economic,  and  even  anti-economic,  in  its 
character.  Socialism  itself,  as  a  system  of  thought 
and  as  a  social  movement,  has  proceeded  from  the 


ECONOMIC  INTERPRETATION  OF  HISTORY     91 

aristocracy  and  the  bourgeoisie,  to  whose  economic 
interests  it  is  bitterly  opposed. 

Enough  has  been  said  to  show  that  there  is 
more  in  life  than  a  merely  economic  struggle  for 
existence,  but  it  must  be  evident  that  the  economic 
side  of  human  life  is  not  to  be  ignored  hi  any  effort 
to  explain  the  history  of  mankind.  Men  desire 
to  live,  and  they  wish  for  happiness,  and  both 
life  and  happiness  seem  to  be  intimately  con- 
nected with  the  acquisition  of  the  necessaries 
and  luxuries  of  life.  In  the  order  of  nature  the 
material  comes  first;  afterward  that  which  is 
spiritual. 

So  the  economic  interpretation  explains  much, 
especially  in  the  earlier  stages  of  history.  As  life 
broadens  with  the  growth  of  civilization,  the  merely 
economic  is  relegated  to  the  background,  and  higher 
phases  of  life  come  to  the  front.  But  the  economic 
basis  is  always  there,  and  the  superstructure  of 
spiritual  life  would  soon  fall  down  if  its  economic 
foundations  were  taken  away.  The  economic  in- 
terpretation is  an  illuminating  conception,  the 
chief  contribution  of  Karl  Marx  to  sociological 
theory,  and  his  highest  claim  to  a  place  among  the 
immortals.  It  is  a  scientific  conception,  and  in  so 
far  as  it  is  a  part  of  Socialism,  Socialism  is  scientific. 
It  does  not  explain  everything,  but  it  explains 
much,  particularly  in  the  realm  of  economic  evo- 
lution. It  is  a  partial  explanation  of  the  past, 


92  ORTHODOX  SOCIALISM 

and  throws  a  glimmering  light  upon  the  future 
pathway  of  the  human  race. 

But  there  is  no  essential  connection  between  the 
economic  interpretation  of  history  and  the  con- 
clusions that  socialists  have  drawn  from  it.  $5eljg- 
nian  says,  "There  is'  nothing  in  common  between 
the  economic  interpretation  of  history  and  the, 
doctrine  of  Socialism  except  the  accidental  fact 
that  the  originator  of  both  theories  happened  to  bo 
the  same  man."  It  is  not  in  itself  a  socialistic 
doctrine,  and  might  be  uphold  by  a  thoroughgoing 
opponent  of  Socialism.  With  respect  to  the  past 
he  might  be  hi  full  accord  with  Karl  Marx,  and  yet 
disagree  with  him  regarding  the  economic  future 
of  the  human  race.  He  might  be  able  to  see  class 
struggles  and  revolutions  in  the  past,  without 
being  convinced  that  future  struggles  will  bring 
about  the  destruction  of  capitalism,  the  abolition 
of  private  property,  and  the  establishment  of  the 
social  commonwealth. 

The  future,  if  not  absolutely  dark,  is  so  obscure 
that  one  might  well  be  justified  in  assuming  the 
position  of  an  agnostic  who  does  not  pretend  to 
prophesy,  does  not  pretend  to  know  what  the  future 
has  in  store  for  the  human  race.  The  historian  is 
not  obliged  to  prophesy,  and  a  careful  scholar  will 
avoid  doing  so,  knowing  the  complexity  of  social 
phenomena,  the  many  unknown  quantities  that 
enter  into  the  solution  of  the  problem  of  the  future, 


ECONOMIC  INTERPRETATION  OF  HISTORY     93 

near  or  remote.  No  doubt,  if  we  knew  all  about  the 
seed,  we  might  predict  the  character  of  the  tree, 
but  where  is  the  seed  that  will  reveal  all  of  its 
secrets,  and  how  can  we  prophesy  concerning  a 
tree  the  like  of  which  we  have  never  seen  ?  History 
repeats  itself,  perhaps,  but,  if  so,  progress  is  not  to 
be  expected;  and  if  we  are  to  hope  for  progress, 
how  can  we  tell  what  kind  of  progress  it  will  be? 
Besides,  we  are  involved  in  the  flow  and  whirl  of 
things,  and  are  unable  to  gain  a  point  of  view  from 
which  to  see  the  direction  in  which  we  are  moving. 
The  economic  interpretation  of  history  may  be  a 
scientific  explanation  of  the  past,  but  when  ap- 
plied to  the  riddle  of  the  future,  it  is  lost  in  a  maze  of 
unverifiable  hypothesis  and  unscientific  speculation. 

Economic  prophecy,  at  best,  is  mere  conjecture, 
and  has  not  yet  attained  the  dignity  of  scientific 
demonstration.  A  degree  of  probability  might  be 
claimed  for  it.  But  prophets  do  not  all  agree. 
The  socialist  may  prophesy  in  a  very  plausible 
manner,  while  the  capitalist,  with  equal  plausibil- 
ity, may  prophesy  against  him,  and  the  future 
alone  can  settle  the  unscientific  conflict  of  opposing 
probabilities. 

In  fact,  the  contrary  opinions  are  probably  due 
less  to  scientific  proof  than  to  conviction  based  on 
sympathy  and  prejudice.  Very  often,  if  not 
generally,  feeling  is  at  the  bottom  of  opinion.  To 
those  who  are  in  sympathy  with  the  capitalist 


94  ORTHODOX  SOCIALISM 

class,  antisocialist  arguments  appear  to  have  great 
weight ;  to  those  who  feel  with  the  common  people 
the  optimistic  prophecies  of  socialists  seem  to  have 
the  validity  of  mathematical  demonstration.  In 
both  cases  the  will  to  believe  is  the  determining 
factor,  and  the  motto  of  both  might  well  be,  in 
the  words  of  Anselm  of  Canterbury,  "  Credo  ut 
intelligam."  Socialism  is  a  doctrine  that  lives 
and  grows,  taking  hold  of  the  minds  and  hearts  of 
millions  of  people;  but  it  is  a  faith  rather  than  a 
science,  deriving  its  power  not  from  the  scientific 
validity  of  its  theories,  but  from  the  faith  of  its 
believers,  and  their  determination  to  bring  about, 
by  every  means  in  their  power,  the  consummation 
which  they  so  ardently  desire. 


CHAPTER  VIII 

THE  CLASS  STRUGGLE 

MARXIAN  Socialism,  as  a  system  of  thought,  is 
based  upon  two  fundamental  principles:  the  doc- 
trine of  the  economic  interpretation  of  history 
and  the  theory  of  surplus  value.  Engels  says: 
'''These  two  great  discoveries,  the  materialistic 
conception  of  history,  and  the  revelation  of  the 
secret  of  capitalistic  production  through  surplus 
value,  we  owe  to  Marx.  With  these  discoveries 
Socialism  became  a  science.'7  A  combination  of 
these  theories  gives  us  the  doctrine  of  the  class 
struggle.  " One  fact,"  says  Marx,  "is  common  to 
all  past  ages,  viz.  the  exploitation  of  one  part  of 
society  by  the  other;'7  and  assuming  that  the 
oppressed  and  oppressing  classes  are  conscious  of 
their  mutual  antagonism,  he  makes  the  still  more 
sweeping  statement,  "The  history  of  all  hitherto 
existing  society  is  the  history  of  class  struggles.",* 

In  ancient  history  Marx  finds  frequent  examples 
of  class  struggles.  The  civilization  of  antiquity 
was  based  upon  the  institution  of  slavery,  and  the 
slaves  were  ever  on  the  point  of  rebelling  against 
the  tyranny  of  their  masters.  The  Helots  of  Sparta 
were  kept  in  subjection  only  by  the  practice  of 

95 


96  ORTHODOX  SOCIALISM 

extreme  severity.  The  debtor  class  of  Athens 
showed  their  power  in  the  reforms  and  constitu- 
tion of  Solon.  The  Plebeians  of  Rome  maintained 
a  constant  struggle  against  the  Patricians.  The 
small  farmers  of  the  later  Republic  were  impover- 
ished by  the  exactions  of  money  lenders  and  the 
growth  of  great  estates.  More  than  once  the  power 
of  the  ruling  class  was  threatened  by  rebellions  of 
slaves  and  gladiators.  The  civil  wars  of  Marius 
and  Sulla,  followed  by  those  of  Caesar  and  Pompey, 
were  class  struggles  of  the  exploited  masses  against 
the  economic  oppression  and  political  tyranny  of 
the  rich. 

The  mediaeval  period  of  European  history  was 
characterized  by  the  institution  of  feudalism,  with 
the  clergy  and  nobility  at  the  top  of  the  social 
system,  and  the  serfs,  who  supported  all  the  rest, 
at  the  bottom.  In  those  times  the  serfs  were  the 
exploited  class,  and  were  conscious  of  the  op- 
pression from  which  they  suffered,  as  can  be  seen 
in  the  rebellion  of  Wat  Tyler  in  England,  the 
Jacqueries  in  France,  and  the  peasants'  rebellion  in 
Germany  at  the  time  of  Luther.  In  this  struggle 
the  peasants  were  ultimately  successful,  for  after  a 
time  serfdom  was  abolished  and  the  modern  labor 
system  took  its  place. 

About  the  time  of  the  Crusades  there  arose 
another  important  class  in  western  Europe,  the 
class  of  merchants  and  artisans  which  afterward 


THE   CLASS  STRUGGLE  97 

became  the  bourgeoisie  or  capitalist  class  of  modern 
times.  Many  of  these  people  were  originally  serfs, 
who,  in  course  of  time,  became  rich  enough  to  buy 
liberties  from  the  lords  of  the  land,  and  thus  be- 
came citizens  of  free  or  chartered  cities.  Such 
were  Venice,  Genoa,  Florence,  and  the  other  great 
Italian  cities.  Such  also  were  Liibeck,  Hamburg, 
and  the  other  members  of  the  Hanseatic  League. 
In  France,  England,  and  the  Netherlands,  too,  there 
were  free  cities,  which  played  an  important  part  in 
the  economic  and  political  life  of  those  countries. 
The  burghers,  banded  together  in  merchant  and 
craft  gilds,  were  both  able  and  willing  to  defend 
their  class  interests  against  their  natural  enemies, 
the  landed  aristocracy,  and  in  all  the  European 
countries  they  increased  in  wealth  and  influence 
until  they  obtained  both  economic  and  political 
supremacy,  and  became  the  dominant  class  in 
modern  industrial  and  political  life.  They  were 
the  "third  estate"  of  France,  which  overcame  the 
aristocracy  in  the  great  revolution  of  1789.  In 
England  they  were  the  Commons,  who  secured 
political  supremacy  by  the  Reform  Bill  of  1832, 
and  have  since  directed  the  domestic  and  foreign 
affairs  of  that  " nation  of  shopkeepers."  In  Ger- 
many the  bourgeois  revolution  occurred  shortly 
after  the  war  of  1870;  in  Russia  it  is  even  now 
coming  to  pass.  In  the  United  States  it  came  about 
as  the  chief  result  of  the  Civil  War,  and  now  the 


98  ORTHODOX  SOCIALISM 

dominant  power  in  every  civilized  country  is  the 
capitalist  class  of  wealthy  manufacturers,  mer- 
chants, and  bankers,  whose  interests  control  to  a 
large  extent  the  economic  and  political  fortunes  of 
the  whole  world. 

But  now  appears  a  threatening  cloud  upon  the 
capitalistic  horizon,  and  the  long-expected  deluge 
is  predicted  by  those  who  read  the  signs  of  the 
times  from  the  viewpoint  of  Marxian  Socialism. 
This  ominous  cloud  is  the  organized  proletariat, 
the  vanguard  of  the  working  class  hi  their  march  to 
attack  the  established  power  of  capitalism.  Capi- 
talism, it  is  claimed,  has  had  its  day ;  the  future  is 
with  the  numerous  and  powerful  working  class. 
Once  they  were  few,  feeble,  and  despised ;  now  they 
are  many,  strong,  and  greatly  to  be  feared.  Like 
the  bourgeoisie,  they  were  originally  serfs.  When 
serfdom  passed  away,  they  became  landless  agri- 
cultural laborers  in  the  country,  and  propertyless 
workers  in  the  cities.  Until  the  industrial  revolu- 
tion they  were  in  a  hopeful  case,  for  it  was  possible 
for  the  agricultural  laborer  to  become  a  farmer, 
and  the  poor  journeyman  of  the  city  might  readily 
obtain  capital  sufficient  to  set  him  up  as  a  master 
craftsman. 

The  modern  proletariat  is  the  creation  of  the 
industrial  revolution,  for  only  wealthy  capitalists 
could  own  expensive  machinery  and  carry  on  pro- 
duction upon  the  large  scale  required  by  the  new 


THE  CLASS  STRUGGLE  99 

conditions.  The  workers  ceased  to  be  independent 
manufacturers,  owning  their  own  tools,  and  became 
propertyless  wage-slaves,  working  under  the  direc- 
tion of  capitalists  whom  they  did  not  know,  and  us- 
ing machinery  and  material  which  they  could  not 
own.  At  the  same  time  the  capitalists  became  a 
distinct  class,  for  they  largely  ceased  to  work 
with  their  own  hands,  and  in  many  cases  were  mere 
stockholders  in  soulless  corporations,  and,  like 
the  absentee  landlords  of  Ireland,  their  chief 
concern  was  to  secure  the  greatest  possible  profit 
at  the  least  possible  expense. 

As  the  classes  became  more  distinct  the  true 
character  of  capitalist  exploitation  was  more  clearly 
seen.  Capital  came  to  be  more  and  more  cen- 
tralized. Capitalists  decreased  in  numbers,  but 
increased  enormously  in  wealth.  The  laboring 
class,  on  the  contrary,  increased  in  numbers,  while 
their  wages  fell  to  the  level  of  a  bare  subsistence. 
The  product  of  industry  was  greater  than  before, 
but  the  laborers  who  created  this  product  were 
hopelessly  sunk  in  the  bottomless  pit  of  slavery, 
degradation,  and  increasing  misery. 

Kautsky,  and  other  socialists  who  do  not  insist 
on  the  law  of  increasing  misery,  strenuously  insist 
on  the  law  of  increasing  exploitation.  In  1860, 
Kautsky  says,  the  total  annual  wage  income  of 
England  was  47  percent,  of  all  incomes;  in  1891 
it  was  only  43  J  per  cent.  Surplus  value,  then,  in 


100  ORTHODOX  SOCIALISM 

1860  amounted  to  53  per  cent,  of  the  national  in- 
come; in  1891  it  was  56  J  per  cent.  Kautsky  does 
not  lay  great  stress  upon  these  figures,  but  says 
that  increasing  exploitation  is  evident  from  the 
growing  extravagance  in  expenditure  of  the  capital- 
ist class,  as  compared  with  the  more  slowly  increas- 
ing expenditure  of  the  working  class. 

True,  the  proletariat  has  made  great  advances 
in  intellectual,  moral,  and  political  life;  but  such 
progress  as  this  has  made  economic  inequality 
harder  to  bear,  awakening  in  the  mind  of  the  work- 
ing man  a  deep  sense  of  injustice,  as  he  sees  the 
material  prosperity  of  those  who,  in  other  respects, 
are  no  better  than  he.  The  fact  of  exploitation  is 
the  basis  of  the  antagonism  between  the  bour- 
geoisie and  the  proletariat,  and  the  fundamental 
cause  of  the  class  struggle  of  recent  times. 

As  the  workers  come  to  perceive  and  under- 
stand the  fact  of  exploitation  they  develop  a  class 
consciousness,  which  greatly  increases  their  fight- 
ing power.  This  class  consciousness  has  manifested 
itself  chiefly  in  the  growth  of  Trade  Unions  in  all 
capitalistic  countries,  by  means  of  which  the 
workers  struggle  for  their  material  interests  in 
an  organized  and  systematic  way.  Yet  the  strike 
and  the  boycott,  the  chief  weapons  of  the  Trade 
Unions,  have  largely  failed  to  better  the  condition 
of  the  laboring  class,  and  now  they  are  coming 
to  realize,  with  Marx,  that  their  economic  salva- 


THE   CLASS  STRUGGLE  101 

tion  can  be  secured  only  by  political  activity,  by 
the  formation  in  every  country  of  a  labor  party, 
the  socialist  party,  which  will  sooner  or  later  ac- 
quire the  political  power,  abolish  capitalism,  and 
establish  social  production  and  distribution  in 
every  branch  of  industry. 

The  political  parties  of  past  times  have  always 
represented  the  interests  of  the  propertied  classes. 
The  Tories,  or  Conservatives,  of  England  have 
consistently  represented  the  interests  of  the  land- 
owning aristocracy,  while  the  Whigs  or  Liberals 
of  that  country  have  chiefly  stood  for  the  interests 
of  the  manufacturing  and  commercial  class.  On 
the  Continent  of  Europe  similar  conditions  prevail, 
while  in  the  United  States  both  of  the  great  political 
parties  are  bourgeois  in  their  character,  represent- 
ing propertied  interests  of  one  kind  or  another. 
Until  recently,  the  workers,  when  they  have  had 
a  vote,  have  voted  with  one  or  the  other  of  the 
bourgeois  parties;  but  now,  realizing  the  wisdom 
of  caring  for  themselves,  they  are  coming  out  from 
among  them  and  forming  parties  of  their  own, 
while  the  bourgeois  parties,  forgetting  their  minor 
differences,  are  drawing  closer  together  for  mutual 
protection  against  the  common  enemy. 

The  growing  power  of  labor  in  all  capitalistic 
countries  is  the  direct  result  of  the  evolution  of 
capitalism.  The  centralizing  movement  of  modern 
industry  has  produced  the  large  factory,  the  cartel 


102  ORTHODOX  SOCIALISM 

or  pool,  and  the  consolidation  or  trust.  Parallel 
to  this  movement  can  be  seen  the  development  of 
larger  and  larger  unions,  federations  of  unions,  and, 
finally,  the  union  of  federations  in  a  political  party, 
representing  the  interests  of  the  laboring  class  as  a 
whole. 

At  the  same  time,  socialists  say,  the  middle  class 
of  small  manufacturers  and  merchants,  who  act  as 
a  buffer  between  the  great  capitalists,  on  the  one 
hand,  and  the  laboring  class,  on  the  other,  is 
gradually  disappearing.  A  few  become  large 
capitalists,  but  the  major  portion  become  wage- 
earners,  and  thus  fall  back  into  the  ranks  of  the 
proletariat.  "Thus,"  says  Marx,  "the  proletariat 
is  recruited  from  all  classes  of  the  population.'7 

In  the  parallel  process  of  political  evolution,  the 
Liberal  Party  in  England,  the  Democratic  Party 
in  the  Northern  States,  and,  in  general,  the  liberal 
parties  in  every  country,  representing  the  middle 
class,  are  being  split  up  into  two  divisions,  the 
smaller  of  which  joins  the  conservative,  or  capital- 
ist, party,  while  the  larger  number  attach  them- 
selves to  the  labor  party,  to  which  they  naturally 
belong.  Thus  there  will  soon  be  only  two  antago- 
nistic parties:  the  party  of  the  minority,  the 
capitalists,  and  the  party  of  the  majority,  the  great 
laboring  class,  overwhelming  in  numbers  and  in- 
vincible in  power. 

Presently  the  social  revolution  will  be  accom- 


THE   CLASS  STRUGGLE  103 

plished.  In  the  words  of  Marx:  "Centralization 
of  the  means  of  production  and  socialization  of 
labor  at  last  reach  a  point  where  they  become 
incompatible  with  their  capitalist  integument. 
This  integument  is  burst  asunder.  The  knell  of 
capitalist  private  property  sounds.  The  expro- 
priators are  expropriated."  In  the  words  of 
Engels,  "The  proletariat  seizes  the  political  power, 
and  turns  the  means  of  production  into  state 
property." 

The  doctrine  of  the  class  struggle  is  an  important 
contribution  to  historical  theory,  but  it  does  by  no 
means  explain  the  whole  of  history.  Most  of  the 
struggles  of  ancient  times  were  sectional  wars 
rather  than  internal  struggles  of  contending  classes. 
Within  a  given  state  the  struggle  was  for  the  most 
part  individual  in  its  character,  and  class  victories 
were  generally  obtained  by  the  simultaneous,  yet 
not  concerted,  efforts  of  many  individuals.  The 
class  existed  before  the  class  struggle,  and  at  times 
individual  effort,  together  with  favorable  social 
conditions,  produced  results  which  cooperative 
struggles  had  failed  to  secure.  Slavery  was 
abolished  in  western  Europe,  not  by  servile  re- 
bellions, but  largely  as  the  result  of  barbaric  in- 
vasions, changes  in  methods  of  production,  and  the 
influence  of  Christian  ideals. 

The  serfs  of  mediaeval  Europe  occasionally  re- 
belled against  their  masters,  but  for  the  most  part 


104  ORTHODOX  SOCIALISM 

they  maintained  an  individual,  rather  than  a  col- 
lective, resistance  to  oppression.  There  was  little 
class  consciousness  and  no  class  struggle  of  the 
modern  type.  The  class  of  serfs,  when  it  ceased  to 
exist,  lost  its  identity  as  a  class,  being  merged  into 
at  least  four  new  classes,  consisting  of  tenant 
farmers,  agricultural  laborers,  bourgeoisie,  and 
wage-earning  proletarians  of  the  free  towns.  The 
serfs,  as  serfs,  did  not  conquer  their  masters,  but 
were  gradually  eliminated  by  the  process  of  eco- 
nomic evolution. 

The  bourgeoisie,  in  their  struggle  against  the 
oppression  of  the  landed  nobility,  passed  through 
a  similar  process  of  transformation.  For  cen- 
turies, by  means  of  their  organizations  and  regu- 
lations, they  developed  a  local  class  consciousness 
and  a  system  of  protection  against  the  landed 
aristocracy,  the  common  laborers  of  town  and 
country,  and  the  bourgeoisie  of  rival  towns.  Fre- 
quently they  established  leagues  or  confederacies 
for  their  mutual  advantage  in  domestic  and  foreign 
trade.  As  population  grew  and  trade  expanded 
there  came  to  be  outside  of  the  gilds  a  large  body 
of  independent  merchants  and  artisans,  so  that  the 
gild  system  was  broken  down,  and  modern  methods 
of  unregulated  competition  took  its  place. 

Then  came  the  industrial  revolution,  which 
created  the  factory  system,  and  brought  about  the 
supremacy  of  the  bourgeoisie  in  England,  France, 


THE   CLASS  STRUGGLE  105 

and  every  other  capitalistic  country.  Many  of 
the  merchants  and  artisans  of  the  eighteenth  cen- 
tury became  large  capitalists  in  the  early  part  of 
the  nineteenth  century;  many  of  them  continued 
to  be  small  capitalists;  while  many,  unable  to 
adapt  themselves  to  the  new  conditions,  sank  into 
the  class  of  proper tyless  wage-earners.  The  capi- 
talist class  has  been  augmented  by  accessions  from 
the  peasant  class,  strengthened  by  fusion  with 
the  landed  aristocracy,  supported  by  a  large  and 
growing  class  of  professional  people,  the  so-called 
"intellectuals,"  and  firmly  intrenched  in  the  sup- 
port of  salaried  employees,  and  the  more  efficient 
and  better  paid  wage-earners,  who  possess  more  or 
less  property,  and  are  ambitious  to  be  classed  with 
their  superiors  in  wealth  and  position,  whose  equals 
they  hope  some  day  to  be.  For  the  modern  bour- 
geoisie is  not  a  privileged  class,  a  close  corporation, 
but  is  open  to  all  who  have  the  strength  to  make 
their  way  into  the  circle  of  property  and  influence, 
while  those  who  fail  to  maintain  their  position  fall 
back  into  the  ranks  of  the  wage-earners.  Such 
is  the  capitalist  class  of  modern  times,  very  dif- 
ferent from  the  bourgeoisie  of  the  eighteenth  cen- 
tury, and  far  more  numerous  and  powerful  than  any 
other  ruling  class  in  the  history  of  the  world. 

In  a  similar  manner  it  can  be  shown  that  the 
working  class  has  had  its  history  of  change  and 
transformation.  Before  the  industrial  revolution 


106  ORTHODOX  SOCIALISM 

the  proletariat  was  chiefly  composed  of  landless 
agricultural  laborers,  journeymen  artisans  and 
other  poor  laborers  in  the  towns,  and  a  large  class 
of  domestic  servants  of  both  sexes,  dependent 
upon  the  rich.  These  people  were  all  very  poor, 
receiving  little  more  than  starvation  wages,  sup- 
plemented by  public  and  private  charity,  and  in  a 
majority  of  cases  expecting  to  end  their  days  in 
the  poorhouse.  A  minority  of  the  agricultural 
laborers,  the  more  efficient,  were  able  to  become 
tenant  farmers,  while  a  minority  of  the  common 
laborers  of  the  towns  could,  by  energy  and  frugality, 
make  their  way  into  the  class  of  master  artisans. 
It  is  a  mistake  to  say  that  the  opportunities  of 
advancement  were  greater  than  they  are  to-day. 
They  were  much  less  than  now,  and  the  material 
condition  of  the  proletariat  in  western  Europe  was 
similar  to  that  found  to-day  in  parts  of  Austria, 
Turkey,  Russia,  and  other  undeveloped  countries 
of  eastern  Europe. 

\  The  industrial  revolution,  by  building  up  the 
manufacturing  and  commercial  towns  of  England, 
created  a  growing  demand  for  labor,  and  to  those 
towns  flocked  young  men  and  women  from  the 
country,  eager  to  secure  the  higher  wages  which 
there  prevailed,  together  with  the  greater  op- 
portunities of  every  kind  which  the  new  towns 
afforded.  This  movement  began  in  England,  but 
presently  spread  to  the  continent  of  Europe  and 


THE   CLASS  STRUGGLE  107 

to  the  United  States.  In  all  countries  where 
capitalism  has  spread,  the  same  phenomena  are 
observed :  a  great  increase  in  population,  especially 
of  urban  population,  and  a  marked  increase  in 
wages,  particularly  in  those  lines  of  industry  in 
which  machinery  is  most  used  and  a  high  degree  of 
skill  is  required  of  the  workers.  But  the  wages 
of  the  most  unskilled  labor  also  have  greatly  in- 
creased. Agricultural  laborers  in  Massachusetts 
in  the  year  1800  received  48  cents  a  day,  without 
board;  in  1883  they  received  $1.37.  In  1800 
common  laborers  in  the  towns  received  62  cents  a 
day;  in  1883  they  received  $1.31.  In  every 
country  where  capitalism  is  introduced  farmers 
complain  of  the  high  wages  of  agricultural  labor- 
ers, and  housekeepers  are  distressed  because  of 
the  enormous  increase  in  the  wages  of  domestic 
servants. 

In  general,  then,  the  industrial  revolution  caused 
in  England  and  in  other  countries  a  general  in- 
crease in  the  material  prosperity  of  all  classes  of 
society.  The  land-owning  class  has  greatly  in- 
creased in  wealth.  The  bourgeois  class  of  the 
present  day  are  far  more  numerous  and  vastly 
more  wealthy  than  the  merchants  and  artisans  of 
the  eighteenth  century.  The  laboring  class  of  the 
present  time  is  far  in  advance  of  the  propertyless 
wage-earners  of  those  days.  In  fact,  the  wage- 
earners  of  to-day  are  at  least  as  prosperous,  on  the 


108  ORTHODOX  SOCIALISM 

average,  as  the  middle  class  of  the  eighteenth  cen- 
tury, and  the  capitalists  of  to-day  are  much  more 
wealthy  than  the  aristocrats  of  that  time. 

True,  some  scions  of  aristocracy  lost  caste  and 
became  shopkeepers  or  even  common  laborers, 
and  many  merchants  and  artisans,  or  their  chil- 
dren, joined  the  ranks  of  the  wage-earners,  but 
the  upward  movement  has  been  even  more  marked, 
and,  as  a  rule,  the  more  efficient  have  pushed  their 
way  upward,  and  the  less  efficient  have  been 
pushed  downward  in  the  economic  and  social 
struggle  for  existence  and  supremacy. J 

But  even  the  lowest  independentTstratum,  that 
of  the  able-bodied,  but  unskilled,  laborers,  has  been 
raised  to  a  level  far  higher  than  that  of  the  same 
class  of  the  eighteenth  century.  Beneath  this 
stratum  is  the  class  of  the  physically  or  mentally 
inefficient,  the  "  submerged  tenth,"  the  chronically 
unemployed,  who  are  supported  by  public  and 
private  charity.  The  miseries  even  of  this  class, 
though  in  many  cases  as  great  as  ever  in  the  his- 
tory of  man,  are  alleviated  to  a  greater  extent  than 
formerly,  and  their  condition,  or  that  of  their 
children,  is  more  hopeful  than  it  was  in  former 
times. 

So  it  is  not  true  that  capitalism  has  brought 
about  an  increase  in  the  misery  of  the  working 
class,  if  by  the  word  "misery"  is  meant  a  lack  of 
the  necessaries  and  luxuries  of  life.  Nor  can  it  be 


THE  CLASS  STRUGGLE  109 

shown  that  exploitation  is  increasing,  if  by  in- 
creasing exploitation  is  meant  an  increase  in  the 
rate  of  interest  and  profits.  As  is  well  known,  the 
rate  of  interest  tends  to  fall  as  capital  increases,  as 
does  also  the  rate  of  profit.  But  if  increasing  ex- 
ploitation involve  the  taking  by  capitalists  of  an  in- 
creasing proportion  of  the  social  income,  it  must  be 
admitted  that  exploitation  in  this  sense  sometimes 
does  increase.  When  a  seamstress  works  by  hand, 
she  may  receive  the  whole  value  of  her  product  in 
the  form  of  wages.  When  she  hires  a  machine,  she 
may  give  50  per  cent,  of  her  wages  to  the  owner  of 
the  machine,  and  yet  the  remaining  50  per  cent, 
may  be  twice  as  much  as  she  formerly  received.  In 
a  mathematical  sense  she  may  be  exploited  to  a 
vastly  greater  extent  than  before,  but  as  a  matter 
of  fact  she  may  not  be  exploited  at  all,  but  greatly 
benefited  by  the  loan  of  an  improved  instrument 
of  production. 

The  figures  given  by  Kautsky  appear  to  show 
that  the  so-called  "rate  of  exploitation"  in  Eng- 
land increased  slightly  between  1860  and  1891, 
but  another  set  of  figures,  at  least  as  reliable  as 
those,  compiled  by  Sir  Robert  Giffen,  lead  to  very 
different  conclusions.  In  1843,  according  to  Gif- 
fen's  tables,  the  wage  income  of  Great  Britain  was 
63  per  cent,  of  the  total  income  of  all  classes ;  while 
in  1883  it  was  66  per  cent,  of  all  incomes.  The 
same  table  shows  that  the  income  of  the  "  manual 


110  ORTHODOX  SOCIALISM 

labor  class,"  not  the  whole  working  class,  in  1843 
was  33  per  cent,  of  all  incomes,  while  in  1883  it 
was  43  per  cent,  of  all  incomes,  showing  a  remark- 
able decrease  in  the ' '  rate  of  exploitation . ' '  But  far 
more  significant  than  any  showing  of  comparative 
incomes  is  the  statement  of  Giffen  that  the  aver- 
age income  of  the  manual  labor  class  in  1835-40 
was  $95  per  head,  while  in  1883  it  was  $205  per 
head,  being  an  increase  in  money  wages  of  over 
100  per  cent. 

Kautsky's  statements  about  the  increasing  con- 
trast between  the  expenditure  of  the  rich  and  that 
of  the  poor  may  appear  to  be  confirmed  by  com- 
mon observation,  but  it  is  by  no  means  confirmed 
by  the  facts  of  history.  In  education,  manners, 
appearance,  dress,  food,  and  housing,  there  is  far 
less  difference  between  rich  and  poor  than  there  was 
a  hundred  years  ago.  If  the  poor  are  now  more 
envious  of  the  rich,  it  is  because  of  greater  equality 
rather  than  greater  inequality.  The  laborers  of 
the  present  day  are  more  intelligent  than  those  of 
former  times;  their  wants  are  more  numerous, 
their  ambition  less  restrained.  They  read  radical 
newspapers  and  socialistic  publications,  and  be- 
lieve, perhaps,  that  they  are  the  victims  of  exploi- 
tation, and  that  no  class  of  men  have  endured  such 
oppression  and  suffered  such  misery  since  the  world 
began.  The  laboring  men  think  that  they  are 
exploited,  and  lend  a  ready  ear  to  socialist  mis- 


THE  CLASS  STRUGGLE  111 

sionaries,  who  confirm  their  half-thought  views, 
intensify  their  hatred  of  the  ruling  class,  and  make 
them  believe  that  economic  salvation  is  to  be  found 
only  in  socialist  faith  and  revolutionary  activity. 
A  large  part  of  the  working  class  already  believe 
in  exploitation ;  it  remains  only  to  convert  the  rest 
to  the  same  opinion  and  the  social  revolution  is  an 
accomplished  fact. 

The  working  class  existed  long  before  it  became 
active  in  anything  like  a  general  class  struggle. 
The  beginning  of  the  class  struggle  was  coincident 
with  the  beginning  of  labor  organizations  in  the 
early  part  of  the  nineteenth  century.  What 
struggles  there  were  before  that  time  were  local  in 
their  origin,  and  individual  rather  than  collective 
in  their  character.  Since  then  the  Trade  Unions 
have  greatly  increased  in  numbers  and  influence. 
Although  they  do  not  in  any  country  include  a 
majority  of  all  laborers,  they  do  include  in  many 
countries  a  large  proportion  of  the  most  skillful 
and  highly  paid  manual  laborers,  the  aristocracy 
of  labor,  and  thereby  wield  an  influence  out  of  all 
proportion  to  their  numbers.  They  carry  on  a 
class  struggle  in  that  they  represent  directly  the 
interests  of  organized  labor,  and  indirectly,  and  to 
a  less  extent,  the  interests  of  unorganized  labor. 
They  have  in  the  past  maintained  chiefly  local 
struggles  by  means  of  the  methods  of  collective 
bargaining,  but  of  late  years  they  have  developed 


112  ORTHODOX  SOCIALISM 

national  and  even  international  organizations,  and 
are  not  only  strong  industrially  but  increasing  in 
political  strength,  and  threaten  to  dominate  the 
political  situation  in  most  capitalistic  countries  at 
no  distant  date. 

So  it  seems  reasonable  to  admit  the  contention  of 
socialists  that  the  laboring  class  in  the  near  future 
will  be  more  thoroughly  organized  than  now,  that 
their  bargaining  power  will  be  greater,  and  that 
their  political  influence  will  be  so  strong  as  to  force 
the  adoption  of  such  changes  in  the  industrial  and 
political  system  as  may  seem  desirable  to  them. 
Already  in  New  Zealand  and  in  the  Commonwealth 
of  Australia  the  working  class  have  great  political 
power,  and  have  inaugurated  for  their  own  benefit 
a  series  of  industrial  experiments  which  promise  to 
be  highly  instructive,  if  not  in  every  case  thoroughly 
successful. 

The  laborers  of  Australia  and  New  Zealand  are 
finding  out,  as  the  laborers  of  other  countries  will 
presently  discover,  that  the  profits  of  capital  are 
not,  as  a  rule,  subtracted  from  the  wages  of  labor, 
but  taken  from  an  additional  product,  which  would 
not  exist  without  the  investment  of  new  capital 
under  the  efficient  direction  of  private  capitalists. 
As  Clark  has  shown,  when  a  unit  of  capital  is 
judiciously  added  to  a  given  supply  of  capital  and 
labor,  the  total  product  is  increased,  but  the  in- 
come of  capital,  per  unit  of  capital,  is  decreased, 


THE    CLASS  STRUGGLE  113 

while  the  wages  of  labor  tend  to  rise,  and  the  labor- 
ers, instead  of  being  robbed,  are  greatly  benefited 
by  the  activity  of  prudent,  yet  enterprising,  in- 
vestors. 

If,  now,  this  unit  of  capital  be  not  applied  in  the 
right  way,  at  the  right  time  and  place,  and  under 
the  proper  combination  of  circumstances,  there 
will  be  little  or  no  increase  in  the  product,  no  ad- 
ditional profit  to  the  investors,  and  no  additional 
wages  to  the  laborers.  Private  investors,  no  doubt, 
frequently  make  mistakes,  and  there  is  much  waste 
connected  with  competitive  production,  but  the 
experiments  that  have  been  tried  by  states,  muni- 
cipalities, and  cooperative  associations  seem  to 
show  that  the  laboring  class  could  not  carry  on 
production  with  a  degree  of  social  efficiency  equal 
to  that  secured  by  the  imperfect,  but  relatively 
efficient,  system  of  competitive  production  for 
private  profit. 

If  this  be  true,  the  laboring  class  would  gain 
nothing  by  seizing  the  means  of  production  and 
operating  them  for  their  own  advantage.  On  the 
contrary,  the  product  of  industry  would  in  all 
probability  be  greatly  reduced;  the  so-called  sur- 
plus value  would  utterly  disappear;  losses  would 
occur ;  wages  would  fall ;  confusion  or  stagnation 
would  characterize  industrial  society:  and  the 
laborers  would  realize,  when  too  late,  that  they  had 
killed  the  goose  that  laid  the  golden  egg. 


114  ORTHODOX  SOCIALISM 

Exploitation  is  not  the  essential  feature  of 
capitalism.  It  is  rather  what  the  logicians  used 
to  call  an  accidental  characteristic,  although  it 
might  almost  be  called  a  "  universal  accident/' 
since  it  is  found  to  a  greater  or  less  extent  in  every 
part  of  the  industrial  world.  Under  perfectly 
free  competition  there  would  be  no  exploitation  at 
all;  but  since  competition  is  nowhere  perfect, 
everywhere  there  is  an  element  of  monopoly,  and 
everywhere  a  degree  of  exploitation.  So  long  as 
competitive  conditions  prevail,  the  slight  degree 
of  monopoly  that  everywhere  exists  is  of  little  or 
no  importance  to  the  laboring  class.  But  when 
capital  is  organized  into  pools  and  trusts,  when 
competition  is  restricted  and  monopoly  profits 
become  large,  the  laborers  have  good  reason  to 
think  that  they  are  not  receiving  a  just  share  in  the 
distribution  of  the  social  income. 

It  is  by  no  means  certain  that  industrial  evolu- 
tion will  bring  about  the  destruction  of  competition, 
and  inaugurate  an  era  of  world  trusts  owned  by  a 
small  number  of  parasitic  capitalists.  On  the  con- 
trary, there  are  many  reasons  for  thinking  that 
competition  will  continue  to  regulate  by  far  the 
greater  part  of  the  world's  industrial  activities, 
and  that  the  ownership  of  those  monopolies  which 
must  exist  will  be  divided  among  a  large  number 
of  moderately  wealthy  stockholders. 

But  if  all  the  Marxian  prophecies  concerning  the 


THE   CLASS  STRUGGLE  115 

concentration  of  capital  are  literally  fulfilled,  even 
then  it  will  not  be  necessary  for  the  laboring  class 
to  assume  the  direction  of  industry.  It  will  not 
be  advantageous  to  them  to  do  so.  It  will  be  more 
profitable  for  them  to  allow  capitalism  to  exist, 
while  using  it  so  as  to  get  for  themselves  the  utmost 
benefit  consistent  with  the  protection  of  industry, 
and  the  encouragement  of  private  enterprise.  As 
in  the  case  of  municipal  monopolies,  it  will  be  a 
question  of  taxation  for  the  general  benefit,  ac- 
cording to  the  principle  of  charging  as  much  as  the 
business  will  bear,  but  no  more,  hi  order  that  the 
advantages  of  private  ownership  and  management 
may  be  preserved,  and  society  at  large  receive  the 
benefits  of  improvements  in  production  which 
social  and  industrial  evolution  have  brought  about.  \ 

No  doubt  the  laboring  class  will  have  something 
to  say  about  this,  and  the  radical  section  will  be 
satisfied  with  nothing  short  of  collectivism  in  all 
branches  of  production.  But  what  reason  is  there 
to  think  that  the  policy  of  the  most  radical  will 
dominate  the  entire  labor  class  ?  All  the  proleta- 
rians will  be  in  the  radical  section,  perhaps,  but  the 
proletarians  are  not  the  whole  of  the  laboring  class. 
They  are  the  least  efficient  of  the  laborers :  those 
receiving  the  lowest  wages,  those  most  frequently 
out  of  employment,  those  whose  interests  appear 
most  antagonistic  to  those  of  their  capitalist 
masters,  those  who,  as  Marx  says,  "have  nothing 


116  ORTHODOX  SOCIALISM 

to  lose  but  their  chains,  and  have  a  world  to 
win." 

The  conservative  section  of  the  laboring  class,  on 
the  other  hand,  will  be  composed,  as  it  is  now,  of 
the  more  efficient  and  more  highly  paid  laborers, 
whose  interests  are  to  a  large  extent  identified  with 
those  of  their  employers,  whose  material  condition 
is  improving,  who  are  acquiring  property,  and  hope 
to  rise,  they  or  their  children,  into  the  capitalist 
class.  If  it  is  to  this  section  of  the  capitalist  class, 
the  aristocracy  of  labor,  that  socialists  must  look 
for  aid  in  propagating  Socialism  and  furthering 
the  social  revolution,  it  may  be  said  with  some 
degree  of  assurance  that  they  will  look  in  vain; 
for  laborers  of  this  class  are  not  wage  slaves;  they 
have  something  to  lose  and  little  to  gain  by 
any  sudden  overthrow  of  the  industrial  order,  by 
the  setting  up  of  any  system  of  social  production 
and  communistic  distribution. 

Besides,  it  must  not  be  forgotten  that  the  capi- 
talist class  itself  is  numerous  and  very  strong, 
and  increasing  in  numbers  and  strength.  It  in- 
cludes the  great  capitalists,  their  salaried  associates, 
and  the  minor  stockholders  in  corporations  great 
and  small.  It  includes  the  small  manufacturers 
and  shopkeepers,  whose  name  is  legion,  and  who  are 
by  no  means  disappearing  from  the  scene.  It 
includes  the  farmers  and  most  of  the  farm  laborers, 
who  are  generally  farmers'  sons.  It  includes  the 


THE  CLASS  STRUGGLE  117 

greater  part  of  the  professional  class  —  lawyers, 
physicians,  teachers,  artists,  and  the  like,  people 
who  in  many  cases  sympathize  with  the  struggles 
of  the  poor,  but  whose  interests  are  identified  with 
those  of  the  capitalist  class,  and  who,  in  many 
cases,  perceive  the  fallacies  of  socialist  theory, 
and  fear  the  chaos  and  stagnation  which  would 
follow  the  social  revolution.  All  these  people,  to- 
gether with  the  conservative  section  of  the  laboring 
class,  will  offer  a  successful  resistance  to  any  radical 
and  revolutionary  program. 

The  so-called  "working  class"  is  not  a  single 
class  of  people  united  by  perfect  community  of 
interests.  It  is  rather  composed  of  a  number  of 
classes,  whose  interests  are  partly  identical  and 
partly  diverse.  It  is  divided  horizontally  into 
various  related,  yet  competing,  occupations,  and 
vertically  into  divisions  based  upon  varying  de- 
grees of  efficiency  and  remuneration.  They  are 
by  no  means  at  peace  among  themselves,  nor  per- 
fectly united  in  hatred  of  a  common  enemy. 
They  have  in  common  a  desire  for  higher  wages 
and  industrial  advancement,  and  might  perhaps 
unite  as  a  political  party  upon  a  platform  based 
upon  such  community  of  interests ;  but  it  is  hardly 
conceivable  that  they  would  ever  unite  upon  the 
basis  of  a  revolutionary  program  looking  toward 
the  abolition  of  capitalism  and  the  destruction  of 
private  property. 


118  ORTHODOX  SOCIALISM 

But  if  they  do,  and  if  they  succeed  in  establishing 
the  social  commonwealth,  will  they  at  the  same 
time  agree  to  abolish  all  sectional  and  private 
differences,  so  that  the  class  struggle  may  forever 
cease  in  the  perfect  harmony  of  democratic  collec- 
tivism? Karl  Marx  thinks  that  there  will  be  an 
era  of  perfect  peace.  There  will  be  no  classes,  and 
therefore  no  class  struggle.  "The  bourgeois  sys- 
tem of  production/'  he  says,  "is  the  last  of  the  an- 
tagonistic forms  of  social  production."  Evolution 
is  to  go  on,  but  without  conflict,  without  struggle. 

To  say  this  is  to  abandon  the  fundamental 
principle  of  the  Hegelian  dialectic,  the  basic 
doctrine  of  the  Marxian  system,  according  to  which 
progress  can  come  only  through  the  synthesis  of 
contradictions,  the  reconciliation  and  compromise 
of  social  antagonisms.  If  progress  must  come 
through  struggle,  the  cessation  of  struggle  must  be 
the  death  of  progress.  The  Marxian  doctrine 
of  the  class  struggle  proves  too  much.  It  proves, 
if  it  proves  anything,  that  class  struggles  will  go 
on  after  the  accomplishment  of  the  social  revolu- 
tion, in  which  case  the  social  democracy  will  be  in 
danger  of  disruption.  But  if,  as  Marx  asserts, 
there  will  be  no  class  struggles,  the  social  revolu- 
tion will  usher  in  an  era  of  universal  stagnation 
and  social  crystallization.  The  Marxian  socialist 
is  equally  uncomfortable  upon  either  horn  of  this 
dilemma. 


CHAPTER  IX 

THE   SOCIAL  REVOLUTION 

MARXIAN  Socialism  is  essentially  revolutionary, 
being  one  of  the  by-products  of  the  French  Revolu- 
tion. That  remarkable  series  of  events  profoundly 
influenced  the  thought  of  Europe  for  more  than  half 
a  century.  It  dominated  also  the  political  develop- 
ment of  Europe  for  many  years,  especially  on  the 
Continent,  where  the  revolutions  of  1830  and  1848, 
together  with  minor  disturbances,  unsettled  the 
political  situation,  and  created  an  impression  of 
instability  in  the  minds  of  all  who  gave  attention 
to  social  phenomena.  The  Manifesto  of  the  Com- 
munist Party,  published  by  Marx  and  Engels  in 
1848,  was  itself  a  revolutionary  phenomenon,  and 
gave  a  marked  revolutionary  character  to  later 
socialistic  thought. 

Since  the  publication  of  Darwin's  "Origin  of 
Species,"  in  the  year  1859,  scientific  thought  in 
every  field  has  been  influenced  by  the  idea  of  evo- 
lution, and  Marxian  socialists  have  been  eager  to 
show  that  the  theories  of  Marx  are  essentially 
evolutionary  in  their  character.  But  they  hold  to 
the  idea  of  revolution  as  essential  to  any  true 
conception  of  social  evolution.  The  idea  of  evo- 

119 


120  ORTHODOX  SOCIALISM 

lution,  as  commonly  presented,  involves  the  thought 
of  a  gradual,  almost  imperceptible  growth  through 
a  long  series  of  years,  or  even  ages,  while  the  con- 
cept of  revolution  involves  the  thought  of  a  more 
or  less  sudden  change,  a  radical  overturning  of 
things,  accompanied  by  more  or  less  violent  dis- 
turbance or  catastrophe.  The  socialist,  in  the  true 
dialectic  spirit,  attempts  a  reconciliation  of  these 
apparently  contradictory  ideas,  by  trying  to  show 
that  revolution  is  a  part  of  evolution,  the  culmina- 
tion or  climax  of  an  evolutionary  process. 

Socialists  like  to  find  catastrophies  in  nature, 
whether  animate  or  inanimate,  for  they  seem  to 
show  that  revolution  is  a  normal  phenomenon  in 
natural  evolution.  Early  scientists,  as  Kautsky 
shows,  upheld  the  catastrophic  theory  of  geological 
history,  while  later  theorists  rejected  the  catas- 
trophe altogether,  holding  that  in  former  ages  there 
was  little  more  disturbance  in  the  earth's  crust 
than  there  is  at  the  present  time.  More  recently, 
Kautsky  says,  geologists  have  found  place  for  the 
catastrophe  in  their  evolutionary  conception  of 
the  past,  and  point  to  floods,  earthquakes,  vol- 
canoes, sudden  subsidence  and  rapid  upheaval,  as 
evidence  of  changes  revolutionary  in  their  char- 
acter. But  what  are  earthquakes  but  slight  quiver- 
ings of  the  earth's  crust,  and  what  are  volcanoes 
but  minute  bubbles  on  the  surface  of  a  slowly 
cooling  mass? 


THE  SOCIAL  REVOLUTION  121 

It  is  hard  to  find  anything  like  a  revolution  in 
geological  history,  but  biological  science  gives 
examples  of  sudden  and  radical  changes  that  seem 
to  be  revolutionary.  True,  the  evolution  of 
species  is  very  gradual,  and  radical  changes  in  the 
flora  and  fauna  of  the  world  occur  only  through 
the  lapse  of  ages;  but  in  the  life  of  individual 
plants  and  animals  are  seen  rapid  and  fundamental 
changes.  Thus,  the  mosquito,  which  spends  its 
early  life  wriggling  in  a  pool  of  stagnant  water, 
presently  becomes  a  winged  insect,  living  in  the 
air.  Butterflies  and  moths  pass  through  several 
processes  of  transformation,  each  successive  ex- 
istence quite  different  from  the  previous  mode  of 
life.  In  the  life  history  of  birds  there  is  the  egg 
stage  and  the  bird  stage,  separated  by  a  revolu- 
tionary act,  the  breaking  of  the  young  bird  out  of 
the  egg.  So  also  in  the  act  of  birth  in  the  human 
species  the  foetus  becomes  the  infant,  and  there  is 
a  complete  transformation  in  the  mode  of  life. 

It  is  hardly  necessary  to  state  that  analogies 
drawn  from  the  life  history  of  individuals  prove 
nothing  with  regard  to  the  process  of  social  develop- 
ment. The  metamorphosis  of  a  butterfly,  or  the 
breaking  of  a  chicken  from  the  egg,  may  illustrate 
the  idea  of  social  revolution,  but  cannot  prove  it  to 
be  a  necessary  part  of  social  evolution.  Besides, 
the  life  history  of  an  individual  is  a  repetition  of  the 
life  history  of  every  other  individual  of  the  same 


122  ORTHODOX  SOCIALISM 

class.  It  is,  as  Engels  puts  it,  an  example  of  nature 
moving  "in  the  eternal  oneness  of  a  perpetually 
recurring  circle,"  and  not  an  instance  of  a  con- 
tinuous evolution  in  a  given  direction  toward  a 
certain  goal. 

Moreover,  although  the  individual  history  of 
the  lower  animals  gives  innumerable  examples  of 
sudden  changes,  their  social  life  shows  few,  if  any, 
similar  modifications.  The  ants,  bees,  and  wasps 
described  by  Lubbock,  doubtless  live  exactly  as 
their  ancestors  did  in  the  time  of  Solomon,  and  the 
birds  of  the  air,  and  the  fishes  of  the  sea,  live 
just  as  they  did  thousands,  and  perhaps  millions, 
of  years  ago. 

Some  examples  can  be  given  of  sudden  altera- 
tions in  modes  of  life  due  to  rapid  changes  in  en- 
vironment. The  Colorado  beetle  has  lived  a  new 
life  since  it  began  to  feed  on  the  luscious  potato 
vine.  The  English  rabbit  has  wonderfully  prospered 
in  Australia.  Certain  vegetarian  insects  have 
greatly  changed  their  mode  of  life  by  association 
with  the  lower  animals  and  man.  The  dog  has 
taken  on  an  almost  human  character  since  his 
domestication  thousands  of  years  ago.  A  peaceful 
parrot  of  New  Zealand  has  become  ferociously 
carnivorous  since  the  introduction  of  sheep  into 
the  islands,  where  formerly  no  quadrupeds  at  all 
were  found.  Instances  like  these,  which  could  be 
multiplied,  merely  show  that  social  evolution  has 


THE  SOCIAL  REVOLUTION  123 

laws  of  its  own,  and  that,  if  a  place  is  to  be  found 
for  the  social  revolution,  it  must  be  found  in  the 
history  of  human  society,  and  not  in  an  investi- 
gation of  lower  forms  of  life,  which  supply,  at  best, 
a  perplexing  medley  of  misleading  analogies. 

Without  doubt  social  evolution  is  more  rapid 
than  biological  evolution.  The  human  body  has 
changed  but  little  since  the  time  of  the  cave 
dwellers,  but  modes  of  life  have  undergone  a 
wonderful  transformation.  During  certain  periods, 
too,  social  movement  is  accelerated,  as  in  the  nine- 
teenth century,  when  the  people  of  western  Europe 
made  greater  progress  in  civilization  than  during 
the  preceding  fifteen  centuries.  Similarly,  the 
people  of  Japan  have  passed  through  a  remark- 
able development  in  the  brief  space  of  fifty  years. 
The  invention  of  new  machines  toward  the  close 
of  the  eighteenth  century  brought  about,  in  less 
than  half  a  century,  the  radical  change  in  methods 
of  production  known  as  the  industrial  revolution. 
Political  evolution  may  be  more  rapid  still,  as  in 
the  case  of  the  French  Revolution,  which  suddenly 
overthrew  the  power  of  the  king  and  the  aristoc- 
racy, and  made  the  bourgeoisie  the  controlling 
influence  in  the  political  life  of  France. 

The  Marxian  conception  of  revolution  is  inti- 
mately connected  with  the  doctrine  of  the  class 
struggle .  Marx  defines  social  revolution  as  "  a  more 
or  less  rapid  transformation  of  the  foundations  of 


124  ORTHODOX  SOCIALISM 

the  juridical  and  political  superstructure  of  society 
arising  from  a  change  in  its  economic  foundations." 
Economic  evolution  may  be  relatively  slow,  and 
the  class  struggle  founded  upon  it  may  go  on  for 
a  long  time  without  any  social  overturning;  but 
suddenly  matters  come  to  a  head,  a  crisis  is  reached, 
the  subordinate  class  becomes  conscious  of  its 
power,  and,  by  a  sudden  effort,  throws  off  the 
domination  of  its  enfeebled  rulers.  This  is  a 
social  revolution,  the  climax,  or  culmination,  of  a 
relatively  long  process  of  social  evolution. 

Reading  history  with  this  conception  in  mind 
one  finds  few,  if  any,  good  examples  of  social  revo- 
lution in  ancient,  or  mediaeval,  times.  Kautsky 
himself  admits  this  and  says,  "The  disappearance 
of  slavery  in  Europe  came  about  so  impercep- 
tibly that  the  contemporaries  of  this  movement 
took  no  notice  of  it."  This  passing  of  serfdom 
in  western  Europe  was  equally  gradual.  In 
neither  case  did  the  subordinate  classes  overthrow 
the  power  of  their  masters.  Slaves  and  serfs  were 
liberated,  were  absorbed  by  the  other  classes,  and 
society  continued  to  be  governed  by  the  land- 
owning aristocracy. 

So  the  bourgeois  revolution  of  the  eighteenth 
and  nineteenth  centuries  is  the  first  and  only 
example  of  a  social  revolution  according  to  the 
conception  of  Marxian  socialists,  and  it  is  not  Jiard 
to  see  whence  that  conception  was  derived.  This 


THE  SOCIAL  REVOLUTION  125 

revolution  was  sudden  and  violent  in  some  coun- 
tries; slow  and  peaceful  in  others.  In  France 
there  was  violence,  bloodshed,  civil  strife,  terror, 
foreign  war,  and  a  condition  of  upheaval  that  did 
not  subside  until  the  downfall  of  Napoleon  hi 
1815;  and  many  historians,  in  view  of  the  revolu- 
tions of  1830, 1848,  and  1871,  have  serious  doubts 
as  to  whether  a  condition  of  stability  in  that  coun- 
try has  yet  been  attained. 

In  England,  on  the  contrary,  there  was  no  sudden 
revolution,  no  civil  war,  and  none  of  the  violence 
commonly  associated  with  the  idea  of  revolution. 
At  the  time  of  the  French  Revolution  the  landed 
aristocracy  controlled  not  only  the  House  of  Lords, 
but  the  House  of  Commons  as  well,  and  it  was 
not  until  the  Reform  Bill  of  1832  that  the  political 
power  passed  into  the  hands  of  the  middle  class. 
The  passage  of  this  bill  was  not  a  sudden  revolu- 
tion, but  a  gradual  one,  and  even  after  it  was 
passed  the  power  of  the  landowners  was  by  no 
means  destroyed,  for  they  have  continued  to  exert 
a  considerable  influence  hi  British  politics  until 
the  present  day. 

The  French  Revolution  was  sudden  and  violent 
because  the  French  people  had  no  representative 
government,  no  constitutional  means  of  redressing 
their  wrongs,  no  power  to  change  their  laws  to 
suit  the  changing  conditions,  no  elasticity  or 
flexibility  in  their  political  system.  The  bourgeois 


126  ORTHODOX  SOCIALISM 

revolution  that  is  going  on  in  Russia  at  the  present 
time  is  violent  for  very  similar  reasons.  Under 
a  rigid  and  oppressive  system  outworn  customs 
are  preserved,  wrongs  accumulate,  abuses  are 
stored  up,  until  the  barriers  of  antiquated  forms 
are  swept  away  and  a  destructive  flood  of  revolu- 
tion sweeps  over  the  land. 

The  French  Revolution  was  a  great  object  lesson 
to  the  world,  and  to  this  day  socialists  think  of  it 
when  they  think  of  the  coming  social  revolution. 
In  the  Communist  Manifesto  Marx  says,  "The 
communists  openly  declare  that  their  ends  can  be 
attained  only  by  the  forcible  overthrow  of  all 
existing  social  conditions,"  and  so  recent  a  writer 
as  Kautsky  declares  that  "society  can  only  be 
raised  to  a  higher  stage  of  development  through  a 
catastrophe." 

Toward  the  end  of  his  life  Marx  did  not  insist 
that  a  sudden  and  violent  revolution  would  be 
necessary  in  every  country,  and  many  socialists 
of  the  present  day  believe  that  the  social  revolution 
will  come  gradually  in  countries  like  the  United 
States  and  England,  where  the  people  have  large 
individual  liberty  and  successful  forms  of  demo- 
cratic government.  The  idea  of  violence,  then,  is 
not  essential  to  the  concept  of  revolution,  and  a 
revolution  need  not  be  very  sudden  in  its  advent. 
The  concept  of  revolution  seems  thus  to  be  losing 
its  content,  but  the  essential  feature  yet  remains, 


THE  SOCIAL  REVOLUTION  127 

—  the  thought  of  the  overturning  of  a  dominant 
social  class  by  a  class  hitherto  exploited  and  op- 
pressed. ]  The  bourgeois  revolution  was  a  revolu- 
tion of  this  character,  and  the  fact  that  one  social 
revolution  has  occurred  is  sufficient  proof  of  the 
possibility  of  another  at  some  future  time. 

The  social  revolution,  dependent  as  it  must  be 
upon  economic  evolution,  cannot  come  before 
economic  conditions  are  ripe  and  the  revolutionary 
class  is  strong  enough  to  obtain,  and  retain,  the 
mastery.  A  premature  revolution,  like  an  un- 
timely birth,  could  result  only  in  failure,  reaction, 
and  sorrow. 

Two  conditions  are  necessary,  in  the  view  of 
Marx,  before  society  will  be  ready  for  the  next 
and  last  social  revolution,  the  revolution  of  the 
proletariat  against  their  bourgeois  rulers  and  op- 
pressors. On  the  one  hand  there  must  be  cen- 
tralization of  capital  in  the  hands  of  the  few,  and 
a  consequent  increase  in  the  mass  of  surplus  value. 
On  the  other  hand  there  must  be  a  growing  number 
of  propertyless  workers,  a  proletariat  whose 
misery  is  increasing,  and  whose  hatred  of  the  rob- 
ber-barons of  industry  is  an  unquenchable  fire. 
In  the  words  of  Marx:  "Along  with  the  con- 
stantly diminishing  number  of  the  magnates  of 
capital,  who  usurp  and  monopolize  all  advantages 
of  this  process  of  transformation,  grows  the  mass 
of  misery,  oppression,  slavery,  degradation,  ex- 


128  ORTHODOX  SOCIALISM 

ploitation;  but  with  this  too  grows  the  revolt  of 
the  working  class,  a  class  always  increasing  in 
numbers,  and  disciplined,  united,  organized  by  the 
very  mechanism  of  the  process  of  capitalistic  pro- 
duction itself.  The  monopoly  of  capital  becomes 
a  fetter  upon  the  mode  of  production  which  has 
sprung  up  and  flourished  along  with,  and  under,  it. 
Centralization  of  the  means  of  production  and 
socialization  of  labor  at  last  reach  a  point  where 
they  become  incompatible  with  their  capitalistic 
integument.  The  integument  is  burst  asunder. 
The  knell  of  capitalist  private  property  sounds. 
The  expropriators  are  expropriated." 

In  this  significant  passage  Marx  foretells  the 
future  of  economic  evolution:  the  division  of 
society  into  two  hostile  camps,  the  irreconcilable 
antagonism  that  must  exist  between  the  exploiters 
and  the  exploited,  and  the  inevitable  victory  of 
the  many  over  the  few,  the  growing  and  powerful 
proletariat  over  the  diminishing  and  decadent 
bourgeois  class. 

The  first  of  these  two  conditions,  the  centraliza- 
tion of  capital,  simple  as  the  concept  may  seem  to 
be,  involves  at  least  three  more  or  less  distinct 
ideas:  the  concentration  of  business  into  large 
corporations  or  trusts ;  the  concentration  of  wealth 
in  the  hands  of  a  few  great  magnates;  and  the 
elimination  of  the  middle  class,  who  are  to  sink  into 
the  class  of  wage-earning  proletarians. 


THE  SOCIAL  REVOLUTION  129 

Whatever  may  be  the  merits  of  the  controversy 
between  Bernstein  and  Kautsky,  it  has  shown 
pretty  clearly  that  economic  evolution  along  these 
lines  is  proceeding  far  more  slowly  than  orthodox 
socialists  like  to  admit.  Even  in  the  United  States, 
where  the  concentration  of  capital  has  been  more 
rapid  than  in  any  other  country,  the  movement 
toward  consolidation  of  railways  and  manufactur- 
ing corporations  has  been  greatly  retarded  in 
recent  years,  and  there  are  facts  which  seem  to 
indicate  that  the  expansion  of  trusts  has  for  the 
present  attained  its  maximum  development.  Not 
only  do  great  numbers  of  small  factories  maintain 
an  independent  existence,  but  there  is  a  revival 
of  the  old-fashioned  handicrafts  for  the  production 
of  articles  of  luxury  superior  to  those  that  can  be 
made  in  factories. 

In  retail  business,  too,  the  departmental  store 
does  not  prevent  the  existence  of  large  numbers 
of  retail  specialists,  who  are  able  to  survive  in 
spite  of  keen  competition  with  their  gigantic  and 
somewhat  unwieldy  rivals.  In  farming,  also,  the 
tendency  is  not  toward  the  consolidation  of  small 
holdings,  but  toward  the  division  of  large  farms, 
and  there  is  no  evidence  to  show  that  the  day 
will  ever  come  when  the  land  of  the  United  States 
will  be  cultivated  by  a  few  great  capitalists  em- 
ploying a  vast  army  of  wage  slaves. 

The  concentration  of  industry  does  not  neces- 


130  ORTHODOX  SOCIALISM 

sarily  involve  the  concentration  of  wealth,  and 
may  even  involve  the  dispersion  of  it.  The  great 
railway  corporations  of  the  United  States  are 
owned  by  thousands  of  stockholders.  Although 
they  are  controlled  by  a  few  men,  this  control  is 
exercised  by  virtue  of  proxies,  which  the  smaller 
stockholders  send  to  large  holders  in  whom  they 
have  confidence.  The  same  is  true  of  trusts,  in 
some  of  which  even  minor  employees  own  a  few 
shares  of  stock. 

Doubtless  a  large  part  of  the  wealth  of  the  United 
States  is  in  the  hands  of  a  few  persons,  but  it  is 
not  easy  to  show  that  concentration  of  wealth  is 
becoming  greater.  Ely  says,  "It  still  remains 
an  open  question  whether  the  concentration  is 
greater  or  less."  T.  S.  Adams  says,  "While 
the  data  upon  this  subject  are  imperfect  and  ten- 
tative, they  indicate  that  the  distribution  of  wealth 
is  becoming  less,  rather  than  more,  unequal." 
These  are  conservative  and  reliable  statements, 
far  different  from  the  view  of  orthodox  socialists, 
as  expressed  by  Marx,  that  "accumulation  of 
wealth  at  one  pole  is  at  the  same  time  accumula- 
tion of  misery,  agony,  toil,  slavery,  ignorance, 
brutality,  mental  degradation,  at  the  opposite  pole." 

It  is  even  less  easy  to  show  that  the  middle  class 
is  being  eliminated  by  the  process  of  capitalistic 
evolution.  The  statistics  given  in  the  Report  of 
the  Twelfth  Census,  while  not  altogether  reliable, 


THE  SOCIAL  REVOLUTION  131 

indicate  that  the  middle  class  of  manufacturers 
and  merchants  is  more  than  holding  its  own. 
From  1890  to  1900  the  number  of  retail  merchants 
increased  by  20  per  cent,  and  the  number  of  whole- 
sale merchants  by  35  per  cent.,  while  the  number 
of  people  having  occupations  increased  by  28  per 
cent.  In  the  same  time  the  number  of  manufac- 
turers and  their  officials  increased  by  59  per  cent., 
and  the  number  of  commercial  travelers,  com- 
monly thought  to  have  been  reduced  by  the  for- 
mation of  trusts,  increased  by  60  per  cent.  To 
these  people  should  also  be  added  the  large  and 
growing  class  of  people  engaged  in  professional 
service,  and  another  large  and  growing  class, 
that  of  the  more  highly  paid  and  more  efficient 
laborers,  who  generally  own  some  property,  and 
who  are  more  closely  allied  to  the  capitalists  than 
to  the  less  highly  paid  and  less  efficient  proletariat. 
They  constitute,  in  fact,  a  new  middle  class,  whose 
prosperity  will  render  the  social  revolution  not 
only  unnecessary  but  impossible. 

The  second  economic  condition  which  must  be 
fulfilled  before  the  proletarian  revolution  can  be 
accomplished  is  the  growth  and  organization  of  the 
proletariat  itself,  the  propertyless  class  of  wage- 
earners,  which,  according  to  Marx,  is  ever  sinking 
deeper  into  the  slough  of  misery  and  degradation. 
But  in  the  United  States,  at  least,  it  cannot  be 
shown  that  the  numbers  of  propertyless  laborers 


132  ORTHODOX  SOCIALISM 

is  relatively  increasing.  On  the  contrary,  the 
relative  number  of  laborers  who  acquire  some 
property  other  than  chattels,  —  a  piece  of  land,  a 
house,  an  insurance  policy,  stock  in  a  corporation, 
-appears  to  be  steadily,  if  slowly,  increasing. 
Certainly,  the  opportunity  of  acquiring  such 
property  seems  to  be  becoming  greater  rather 
than  less,  and  a  majority  of  the  laborers  of  the 
United  States  can,  if  they  will,  accumulate  property 
as  a  means  of  augmenting  then-  income  and  as  a 
provision  against  a  rainy  day.  C.  B.  Spahr  can- 
not be  accused  of  having  a  roseate  view  of  economic 
conditions,  and  yet  he  says,  "  There  are  about 
7,000,000  property-owning  families  in  the  United 
States,  and  only  about  5,500,000  who  could  justly 
be  spoken  of  as  propertyless." 

To  admit  that  the  number  of  propertyless  work- 
ers is  decreasing  seems  to  the  more  orthodox 
socialist  to  involve  the  admission  that  the  social 
revolution  will  never  come.  When  Bernstein 
asserted,  at  a  socialist  gathering  in  Stuttgart,  that 
the  number  of  property  owners  was  increasing, 
Kautsky  said,  "If  the  capitalists  and  not  the 
propertyless  are  increasing  in  numbers,  then  we 
are  falling  farther  and  farther  behind  hi  our 
struggle  toward  the  goal;  then  capitalism  is  being 
intrenched  and  Socialism  is  farther  away  than 
ever."  To  this  Bernstein  replies,  "The  outcome 
of  this  struggle  does  not  depend  upon  the 


THE  SOCIAL  REVOLUTION  133 

concentration  of  capital  in  the  hands  of  an  ever 
diminishing  number  of  magnates,  nor  upon  the 
entire  dialectic  scaffold  whereon  this  theory  rests, 
but  upon  the  increase  of  social  wealth,  productive 
power,  and  general  progress,  and  especially  upon 
the  intellectual  and  moral  maturity  of  the  working 
class  itself." 

A  position  like  this  is  far  stronger  than  that  of 
orthodox  Socialism.  The  working  class,  hi  spite 
of  prosperity,  or  because  of  it,  is  growing  in  eco- 
nomic and  political  power  in  every  capitalistic 
country.  The  socialists  of  Germany,  only  a  part 
of  the  working  class,  cast  in  the  imperial  elections 
over  3,000,000  votes.  The  socialist  vote  in  France 
is  now  nearly  1,000,000;  in  Belgium,  300,000;  in 
Italy,  250,000;  in  Switzerland,  100, 000.  The  social- 
ist vote  in  the  United  States  was  36,275  in  the 
presidential  election  of  1896;  in  1900  it  was  98,424; 
and  in  1904  it  was  434,572.  In  Great  Britain  the 
socialist  vote  in  1900  was  about  100,000;  in  the 
election  of  1906  it  was  probably  over  300,000.  In 
the  new  British  Parliament  there  is  an  independent 
labor  group  of  about  29  members,  not  all  socialists, 
but  organized  under  the  leadership  of  Keir  Hardy, 
and  representing  distinctively  the  interests  of  the 
working  class.  In  the  federal  House  of  Represen- 
tatives of  Australia,  the  representatives  of  labor 
number  about  24,  out  of  a  total  of  72  members. 
The  socialist  vote  of  the  world  may  be  estimated 
at  about  6,000,000. 


134  ORTHODOX  SOCIALISM 

The  working  class,  as  a  whole,  constitutes  a  ma- 
jority of  the  people  in  every  capitalistic  country, 
and  if  they  were  united  into  a  single  political  party, 
they  could  modify  or  abolish  capitalism  and  es- 
tablish any  system  of  production  and  distribution 
that  might  seem  desirable  to  them.  But  the 
working  class  is  not  united,  nor  is  it  likely  to  unite 
upon  a  platform  so  radical  as  that  of  revolutionary 
Socialism.  Socialists,  even  in  Germany,  bemoan 
the  lack  of  solidarity  among  the  working  class, 
and  call  upon  them  to  put  aside  their  trivial  differ- 
ences and  present  a  united  front  to  the  com- 
mon enemy.  But  the  working  men  are  even 
less  united  in  England  and  the  United  States, 
where  they  are  more  free  and  more  prosperous, 
than  they  are  in  Germany.  As  Bernstein  says, 
"  Liberty  develops  a  spirit  of  individuality,  and 
even  of  peculiarity." 

Within  the  ranks  of  professed  socialists  there  isj 
by  no  means  complete  unanimity  of  opinion  and 
purpose.  Not  all  labor  representatives  are  social- 
ists, nor  all  who  vote  the  socialist  ticket.  Many 
of  the  so-called  socialists  of  Germany  would  be 
called  reformers  in  England  and  in  the  United 
States.  In  fact,  the  socialist  party  of  Germany 
is  coming  to  be  a  party  of  reform  rather  than  a 
party  of  radical  revolution.  Also,  the  theoretical 
foundations  of  Socialism  are  being  undermined  by 
criticism  from  without  and  from  within.  Ortho- 


THE  SOCIAL   REVOLUTION  135 

dox  Socialism  has  been  shown  to  be  theoretically 
unsound,  and  its  fundamental  doctrines  will  need 
to  be  revised  if  they  are  to  appeal  to  the  growing 
intelligence  of  the  working  class. 

Although  it  is  highly  improbable  that  the  work- 
ing class  of  the  United  States  will  ever  unite  in 
support  of  the  program  of  revolutionary  Socialism, 
it  is  quite  conceivable  that  they  may,  at  no  distant 
date,  unite  to  form  a  political  party  to  represent 
their  own  interests,  to  help  in  every  possible  way 
to  improve  their  own  material  condition.  With- 
out doubt  the  Republican  and  Democratic  parties 
are  largely  controlled  by  capitalistic  influence,  and 
there  is  no  great  party  which  represents  the  in- 
terests of  the  working  people  as  such.  The  great 
question  of  the  day  is  the  question  concerning  the 
distribution  of  wealth,  and  it  is  reasonable  to  sup- 
pose that  the  political  parties  of  the  future  will 
divide  upon  an  issue  so  vital  to  all  classes  of  society. 

The  formation  of  a  labor  party  by  no  means  in- 
volves the  political  triumph  of  that  party,  but  it 
must  be  admitted  that  such  a  triumph  is  within 
the  bounds  of  possibility.  Let  us  then  suppose 
that  the  working  class,  not  merely  the  proletariat, 
but  the  whole  working  class,  obtains  the  political 
power  in  municipal,  state,  and  federal  governments. 
This  is  the  social  revolution  so  much  desired  by 
socialists  and  so  greatly  feared  by  capitalists. 
The  class  once  subordinate  has  become  dominant, 


136  ORTHODOX  SOCIALISM 

and  the  class  once  dominant  has  become  of  second- 
ary importance.  The  revolution  is  accomplished, 
and  it  now  remains  for  the  working  class  to  use  their 
power  for  their  own  advantage.  What  will  they 
do? 

The  socialist  has  his  answer  ready.  In  the  words 
of  the  Communist  Manifesto,  "The  proletariat 
will  use  its  political  supremacy  to  wrest,  by  de- 
grees, all  capital  from  the  bourgeoisie,  to  centralize 
all  instruments  of  production  in  the  hands  of  the 
State.7'  Was  there  ever  a  more  gratuitous  as- 
sumption? Why  should  the  working  class  do 
this  ?  They  should  do  it  if  socialized  capital  would 
be  more  productive  than  capital  in  private  hands. 
But  is  there  any  reason  to  think  that  it  would  be 
so  ?  There  is  every  reason  to  think  that  socialized 
capital  would  be  far  less  productive  than  capital 
managed  by  private  owners  for  private  gain.  The 
efficiency  of  the  public  servant  is  not  to  be  com- 
pared to  that  of  the  employee  of  a  private  concern. 
The  public  service  in  general,  with  its  red-tape 
and  routine,  its  conservative  and  unprogressive 
spirit,  its  lack  of  enterprise  and  initiative,  its 
slowness  and  sense  of  security,  is  in  its  very  nature 
far  less  efficient  than  a  large  private  corporation, 
and  still  less  efficient  when  compared  with  a  pri- 
vate business  carried  on  under  the  direct  super- 
vision of  the  proprietor,  whose  economic  existence 
is  dependent  upon  the  success  of  the  enterprise 


THE  SOCIAL   REVOLUTION  137 

which  he  has  in  hand.  As  Seligman  says,  "With 
human  nature  as  it  exists  at  present,  and  as  it 
bids  fair  to  continue  for  an  incalculable  future, 
Socialism,  if  ever  realized  in  practice,  would  be  the 
death  knell  of  economic  advance  and  true  social 
betterment." 

If  it  be  true  that  the  public  service  is  essentially 
inefficient,  that  collective  organization  cannot  take 
the  place  of  private  enterprise,  and  that  the  vast 
and  complicated  industrial  organization  could  not 
be  successfully  operated  without  the  security  of 
private  property  and  the  stimulus  of  private  gain, 
it  is  reasonable  to  suppose  that  the  dominant  labor 
class  of  the  future  will  be  aware  of  that  fact,  and 
will  bend  their  energies,  not  to  the  destruction  of 
capitalism  but  to  the  preservation  and  utilization 
of  it.  They  will  not  try  the  dangerous  experiment 
of  socializing  the  means  of  production,  but  will 
leave  them  in  the  hands  of  those  who  can  use  them 
best,  so  that  the  goose  which  lays  golden  eggs  may 
continue  to  lay  golden  eggs,  for  the  benefit  of  all 
concerned.  The  social  revolution,  then,  will  be  a 
revolution  without  Socialism,  or  without  that  par- 
ticular form  of  Socialism  expected  by  the  followers 
of  Marx. 

A  revolution  such  as  this  is  not  greatly  to  be 
feared,  for  it  will  not  come  until  the  time  is  ripe 
and  the  working  people  have  attained  a  degree  of 
intellectual  and  moral  maturity  such  as  will  fit 


138  ORTHODOX  SOCIALISM 

them  for  political  and  industrial  domination. 
Doubtless  it  will  be  many  years  before  such  con- 
ditions will  be  attained,  but  meanwhile  the  grow- 
ing power  of  the  working  class  will  do  much  to 
mitigate  the  evils  of  capitalism,  to  eliminate  ex- 
ploitation, and  to  secure  for  all  workers  a  just 
share  in  the  distribution  of  the  common  product. 
Socialists  do  not  sufficiently  consider  the  pos- 
sibilities of  improvement  within  the  capitalistic 
system.  They  are  unduly  pessimistic  with  regard 
to  the  present,  and  extravagantly  optimistic  with 
regard  to  the  future.  Human  nature  under 
capitalism  is  utterly  bad;  when  Socialism  is  es- 
tablished, it  will  be  well-nigh  perfect.  At  present 
the  working  class  can  do  nothing  to  improve  their 
condition;  when  they  obtain  the  political  power, 
they  will  be  able  to  do  everything.  This  is  a 
striking  example  of  mental  perversion,  remind- 
ing one  of  the  doctrines  of  certain  theologians, 
who  believe  in  the  total  depravity  of  the  wicked 
and  the  absolute  perfection  of  the  good.  In  such 
a  dualism  there  is  a  contradiction  which  no  amount 
of  dialectical  synthesis  can  ever  explain  away. 
Far  more  reasonable  is  the  opinion  of  Ely,  who 
says,  "It  is  my  belief  that  our  existing  society 
has  great  vitality,  that  it  is  sound  in  its  most  es- 
sential elements,  that  a  widely  diffused  ownership 
of  wealth  is  practicable,  and  that  the  work  which  is 
required  is  improvement  along  existing  lines." 


THE  SOCIAL   REVOLUTION  139 

Orthodox  Socialism  proceeds  from  Germany, 
and  bears  the  earmarks  of  its  origin.  The  British 
and  American  spirit  is  quite  different,  being  neither 
optimistic  nor  pessimistic,  but  rather  melioristic, 
in  its  attitude  toward  the  evils  of  the  present  time. 
It  is  a  spirit  of  compromise  and  common  sense, 
whereby  abuses  tend  to  be  eliminated  one  by  one, 
as  fast  as  may  be,  without  an  accumulation  of  evils 
necessitating  a  revolution  to  sweep  them  all  away. 
In  this  way  the  English  and  American  constitu- 
tions have  gradually  grown  to  fit  the  political  body 
like  a  skin,  and  not  like  a  ready-made  suit  of 
clothes.  In  this  way  many  of  the  abuses  of  capi- 
talism have  been  removed,  and  many  more  will 
be  removed  in  time  to  come.  Socialists  do  not 
sufficiently  consider  the  evolution  of  law  as  an 
essential  part  of  social  evolution.  They  speak  of 
economic  and  political  evolution,  but  appear  to 
regard  the  law  as  a  system  of  cast-iron  customs, 
rigid  fetters,  binding  the  limbs  of  society  in  the 
dungeon  of  an  outworn  civilization,  not  removable 
one  by  one,  but  all  together  in  the  throes  of  a 
terrible  revolution,  when,  like  Samson  of  old, 
society  says,  "I  will  go  out  and  shake  myself. " 

This  conception  of  social  life,  however  applicable 
it  may  be  to  Germany,  Russia,  and  other  countries 
where  the  normal  growth  of  law  is  checked  by  the 
organized  power  of  an  uncompromising  and  short- 
sighted ruling  class,  supported  by  a  standing  army 


140  ORTHODOX  SOCIALISM 

and  a  conservative  bureaucracy,  cannot  apply 
to  Great  Britain,  the  United  States,  and  other 
democratic  countries,  where  the  will  of  the  people 
is  the  supreme  law,  and  laws  are  sooner  or  later 
changed  to  suit  the  changing  environment.  Cus- 
tom and  law,  like  the  habits  of  an  individual,  are 
hard  to  change,  but  they  may  be  changed  and  new 
customs  may  be  formed,  especially  while  society 
is  young.  Legal  evolution,  therefore,  lags  behind 
economic  development,  until  abuses  appear  for 
which  there  is  no  remedy.  Then  the  law  overtakes 
the  new  economic  conditions,  the  remedy  is  found, 
and  social  evolution  moves  on  through  a  series  of 
compromises,  from  one  stumbling  block  to  another, 
always  imperfect,  but  always  perfectible,  toward 
a  distant  and  ever  receding  goal  —  the  welfare  of 
the  human  race. 


SELECTED  LIST  OF  BOOKS  IN  ENGLISH 

Adams,  T.  S.,  and  Sumner,  H.  L.,  Labor  Problems.     1905. 
Ashley,  W.  J.,  The   Progress   of   the   German  Working 

Classes.     1904. 

Bellamy,  E.,  Looking  Backward.     1887. 
Bliss,  W.  D.  P.,  ed.    The  Encyclopedia  of  Social  Reform. 

1895. 
Bohm-Bawerk,  E.  von.,  Karl  Marx  and  the  Close  of  his 

System.    Trans.  1898 
Boudin,  L.  B.,  Articles  on  Value  in  the  International 

Socialist  Review.     1905-06. 

Bowley,  A.  L.,  Wages  in  the  United  Kingdom.     1900. 
Carver,  T.  N.,  The  Distribution  of  Wealth.     1904. 
Cathrein,  V.,   Socialism  Exposed  and  Refuted.    Trans. 

1892. 

Clark,  J.  B.,  The  Distribution  of  Wealth.     1899. 
Clark,  J.  B.,  The  Problem  of  Monopoly.     1904. 
Cunningham,  W.,  The  Growth  of  English  Industry  and 

Commerce.     2  vols.     1890-92. 
Donisthorpe,  W.,   Individualism,   a  System  of  Politics. 

1889. 

Drage,  G.,  The  Unemployed.     1894. 
Ely,  R.  T.,  French  and  German  Socialism.     1883. 
Ely,  R.  T.,  Socialism  and  Social  Reform.     1894. 
Ely,  R.  T.,  Studies  in  the  Evolution  of  Industrial  Society. 

1903. 
Engels,   F.,    Socialism,   Utopian  and   Scientific.    Trans. 

1880. 

141 


142     SELECTED  LIST  OF  BOOKS  IN  ENGLISH 

Ensor,  R.  C.  K.,  Modern  Socialism.     1904. 

Fabian  Essays.     1889. 

Ferri,  E.,  Socialism  and  Modern  Science.     1895.    Trans. 

1900. 

Fetter,  F.  A.,  The  Principles  of  Economics.    1904. 
Flint,  R.,  Socialism.     1895. 
Flux,  A.  W.,  Economic  Principles.     1904. 
Giffin,  R.,  Essays  in  Finance.     1887. 
Giffin,  R.,  Economic  Inquiries  and  Studies.     1904. 
Graham,  W.,  Socialism  Old  and  New.     1890. 
Guyot,  Y.,  The  Tyranny  of  Socialism. 
Gronlund,  L.,  The  Cooperative  Commonwealth.     1890. 
Gronlund,  L.,  The  New  Economy.     1898. 
Hadley,  A.  T.,  Economics.     1896. 
Hillquit,  M.,  History  of  Socialism  in  the  United  States. 

1903. 

Hirsch,  M.,  Democracy  versus  Socialism.     1901. 
Hobson,  J.  A.,  Problems  of  Poverty.     1895. 
Hobson,  J.  A.,  The  Problem  of  the  Unemployed.     1896. 
Hobson,  J.  A.,  The  Evolution  of  Modern  Capitalism.     1897. 
Hobson,  J.  A.,  The  Economics  of  Distribution.     1903. 
Hunter,  R.,  Poverty.     1904. 
Hyndman,  H.  M.,  The  Historical  Basis  of  Socialism  in 

England.     1883. 

Jaures,  J.,  Studies  in  Socialism.    Trans.  1906. 
Jones,  E.  D.,  Economic  Crises.     1900. 
Kaufmann,  M.,  Socialism  and  Modern  Thought.     1895. 
Kaufmann,  M.,  Socialism. 
Kautsky,    K.,    The    Social    Revolution.     1902.    Trans. 

1905. 

Kirkup,  T.,  History  of  Socialism.     1900. 
Labriola,  A.,  Essays  on  the  Materialistic  Conception  of 

History.     1896.     Trans.  1903. 
Ladoff,  I.,  American  Pauperism.     1904. 


SELECTED  LIST  OF  BOOKS  IN  ENGLISH     143 

Lafargue,  P.,  The  Evolution  of  Property.    Trans.  1890. 
Laveleye,  E.  de.,  The  Socialism  of  To-day. 
Le  Bon,  G.,  The  Psychology  of  Socialism.    Trans.  1899. 
Levasseur,  E.,  The  American  Workman.     1897.    Trans. 

1900. 

London,  J.,  War  of  the  Classes.     1905. 
Loria,  A.,  The  Economic  Foundations  of  Society.    Trans. 

1902. 
Malthus,  T.  R.,  An  Essay  on  the  Principle  of  Population. 

1798. 

Marshall,  A.,  Principles  of  Economics.    4th  ed.     1898. 
Marx,  K.,  and  Engels,  F.,  The  Manifesto  of  the  Communist 

Party.     1848. 

Marx,  K.,  Capital.    Vol.  1.     1867.    Trans.  1886. 
Mill,  J.  S.,  Principles  of  Political  Economy.     1848. 
Mills,  T.  W.,  The  Struggle  for  Existence.     1904. 
More,  T.,  Utopia.     1516. 
Morris,  W.,  and  Bax,  E.  B.,  Socialism,  its  Growth  and 

Outcome.     1896. 

Mulhall,  M.  G.,  Industries  and  Wealth  of  Nations.     1896. 
Nicholson,  J.  S.,  Historical  Progress  and  Ideal  Socialism. 

1894. 
Nicholson,  J.  S.,  Principles  of  Political  Economy.    3  vols. 

1893-1901. 

Nitti,  F.  S.,  Catholic  Socialism.     1891.    Trans.  1894. 
Palgrave,  J.  I.,  ed.    Dictionary  of  Political  Economy. 

1894-99. 
Pierson,    N.    G.,    Principles   of   Economics.     1896-1902. 

Trans.  1902. 

Plato  (427-347  B.C.),  The  Republic. 
Proudhon,    P.    J.,    What    is    Property?     1841.    Trans. 

1876. 

Rae,  J.,  Contemporary  Socialism.     1889. 
Rae,  J.,  Eight  Hours  for  Work.     1894. 


144     SELECTED  LIST  OF  BOOKS  IN  ENGLISH 

Ricardo,  D.,  Principles  of  Political  Economy  and  Taxa- 
tion.    1817. 
Rodbertus,  K.,  Overproduction  and  Crises.     1850.    Trans. 

1898. 

Russell,  B.  A.,  German  Social  Democracy.     1896. 
Ryan,  J.  A.,  A  Living  Wage.     1906. 
Schaffle,  A.  E.  F.,  The  Quintessence  of  Socialism.     1874. 

Trans.  1889. 
Schaffle,  A.  E.  F.,  The  Impossibility  of  Social  Democracy. 

1885.     Trans.  1892. 

Seager,  H.  R.,  Introduction  to  Economics.     1904. 
Seligman,   E.   R.   A.,   The   Economic   Interpretation  of 

Socialism.  1902. 

Seligman,  E.  R.  A.,  Principles  of  Economics.     1905. 
Simons,  A.  M.,  The  American  Farmer.     1903. 
Sombart,  W.,  Socialism  and  the  Social  Movement  in  the 

Nineteenth  Century.     1897.     Trans.  1898. 
Spahr,  C.  B.,  The  Present  Distribution  of  Wealth  in  the 

United  States.     1896. 

Strong,  J.,  ed.     Social  Progress.    A  Year  Book.     1905. 
Taylor,  W.  G.  L.,  The  Kinetic  Theory  of  Economic  Crises. 

1904. 
Vandervelde,  E.,  Collectivism  and  Industrial  Evolution. 

Trans.  1901. 

Veblen,  T.,  The  Theory  of  Business  Enterprise.     1904. 
Webb,  S.,  Socialism  in  England.     1893. 
Webb,  S.  and  B.,  The  History  of  Trade  Unionism.     1902 
Webb,  S.  and  B.,  Industrial  Democracy.     1902. 
Zenker,  E.  V.,  Anarchism,  a  Criticism  and  History.     1898. 


INDEX 


Adams,  T.  S.,  27,  130. 
Amsterdam,  Congress  at,  6. 
Anarchy  of  production,  68,  74, 

79. 

Anselm  of  Canterbury,  94. 
Aristotle,  81. 
Atkinson,  E.,  28. 
Australia,  112,  133. 

Bebel,  A.,  6,  30. 

Bellamy,  E.,  2. 

Bernstein,  E.,  11,  77,  129,  132, 

134. 

Boudin,  L.  B.,  21. 
Bourgeoisie,  9,   10,  62,  91,  97, 

105,  124,  127,  136. 
Bourgeois  parties,  101,  135. 
Bowley,  A.  L.,  28. 
Brook  Farm,  8. 
Buckle,  82. 

Campanella,  7. 

Capitalism  and   capitalists,  29, 

32,  35,  36,  38,  43,  55,  62,  75, 

93,  99,  101, 107,  116,  135,  138. 
Carlyle,  T.,  25. 
Cataclysm    in  nature,    11,    44, 

120. 

Chaucer,  24. 

China,  29,  42,  45,  51,  54. 
Christianity,  1,  103. 
Clark,  J.  B.,  112. 
Class  consciousness,  100,  104. 
Collapse  of   capitalism,  63,  68, 

76,  78. 

Collective  bargaining,  112. 
Collectivism,  10,  12,  115. 
Commercial  travelers,  52,  131. 
Commodity,  13,  16,  19. 
Competition,   49,    68,    77,    104, 

114. 

Compromise,  139. 
Concentration    of    capital,    10, 

101,  130. 


Constant  capital,  46,  50. 
Cost  of  production,  13-23,  73. 
Cost  of  reproduction,  17. 
Credit,  70,  76. 

Creed  of  Socialism,  1-12,  34,  94. 
Crises,  9,  11,  44,  59,  61-79. 
Crusades,  85,  90. 
Cunningham,  W.,  55. 

Darwin,  C.,  3,  119. 
David,  Dr.,  30. 
Democracy,  12,  126,  140. 
Departmental  store,  129. 
Dialectics,  81,  82,  120,  133,  138. 
Dismal  science,  25. 
Distribution    of    wealth,  2,  32, 

34,   99,    109,    128,    130,    132, 

138. 

Economic  interpretation  of  his- 
tory, 10,  11,  80-93,  95. 

Economists,  11,  13,  44. 

Efficiency  in  production,  22,  49, 
56,  113,  116,  137. 

Ely,  R.  T.,  130,  138. 

Engels,  F.,  6,  8,  26,  62,  68,  74, 
83,  95,  103,  122. 

Enterprise,  38,  78,  113,  136. 

Equality,  1,  110. 

Erfurt  Program,  26. 

Essentials  of  Socialism,  4,  9,  12, 
23. 

Evolution,  12,  75,  82-94,  101, 
119-128,  138. 

Exploitation,  9,  12,  32^4,  46, 
95,  100,  109,  114,  128. 

Faith  of  Socialism,  1-12,  34,  94. 

Farming,  116,  129. 

Feudalism,  10,  85,  96,  104,  124. 

Foreign  commerce,  63,  67. 

Fourier,  7. 

Franklin,  B.,  32. 

Free  cities,  97. 


145 


146 


INDEX 


Giffin,  Sir  R.,  28,  109,  110. 
Gilds,  97,  104. 

Hardy,  Keir,  133. 
Hegel,  3,  81,  82,  88. 
Heraclitus,  80. 
Hours  of  labor,  47,  56. 

Increasing  misery,  25,  29,  47, 
99,  110,  127,  130,  138. 

India,  29,  42. 

Industrial  reserve  army,  27,  47. 

Industrial  revolution,  45,  98, 
107,  123. 

Inequality,  1,  110. 

Intellectuals,  105,  117,  131. 

Interest,  Rate  of,  39,  109. 

Iron  law  of  wages,  9,  24-31. 

Japan,  123. 

Jaures,  J.,  11. 

Jones,  E.  D.,  64. 

Justice,  15,  33,  36,  44,  114. 

Kautsky,  K.,  6,  30,  31,  100,  109, 

120,  124,  126,  129,  132. 
King,  Gregory,  55. 

Labor,  Aristocracy  of,  111,  116, 

131. 

Labor  cost,  13-23,  33. 
Labor  party,  101,  112,  117,  133, 

135. 

Land,  Value  of,  15. 
Lassalle,  F.,  25. 
Law,  Evolution  of,  139. 
Levasseur,  E.,  51. 
Liebknecht,  W.,  6. 
Losses  in  business,  20,  70,  73, 

78. 

Louisiana  Company,  72. 
Lubbock,  Sir  J.,  122. 

Machinery,  27,  45-60,   61,   64, 

123. 
Malthusian  theory,  24,  26,  49, 

59. 

Marx,  K.,  passim. 
Massachusetts,    Wages    in,    27, 

107. 

Metamorphosis  of  insects,  121. 
Mills,  T.  W.,  78. 
Monopoly,  40,  114,  115,  127. 


Morgan,  L.  H.,  83. 
Mulhall,  M.  G.,  28. 

Napoleon,  86,  90,  125. 
New  Zealand,  112. 

Optimism   of  Socialism,   6,  94. 

139. 
Orthodox  Socialism,  3,  4,  8,  11, 

15,  23,  29,  46,  130,  133,  139. 
Overproduction,  9,  48,  61-79. 
Owen,  R.,  6,  7. 

Parasites,  3,  27,  32,  36,  39,  114. 
Pessimism  of  Socialism,  25,  60, 

139. 

Plato,  2,  6,  7. 
Poverty,  9,  24,  47,  64. 
Prediction,  6,  87,  93,  112,  114, 

128. 
Price   of   commodities,     13-23, 

66. 
Productivity  of  labor,   49,   51, 

58,  112,  136. 

Professional  class,  105,  117,  131. 
Profits,  35,  38,  109,  112. 
Proletariat,   7,    10,   26,   37,   62, 

98,  100,  115,  128,  132,  136. 
Propaganda  of  Socialism,  6,  68, 

111,  116. 
Property,  39,  40,  48,  105,  127, 

132. 
Proudhon,  P.  J.,  40. 

Rae,  J.,  56. 

Rebellion,  2,  86,  90,  96. 

Reform,  1,  11,  44,  112,  115,  134, 

137,  139. 

Reform  Bill,  97,  125. 
Reformation,  86,  90. 
Renaissance,  85,  90. 
Rent,  35,  39. 
Revision   of   socialist   doctrine, 

135. 
Revolution,  French,  86,  97,  119, 

125,  126. 

Revolution  of  1848,  8,  119,  125. 
Revolution,  Social,   10,  12,  44, 

111,  119-140. 
Ricardo,  D.,  3,  13,  25. 
Rodbertus,  K.,  61,  62,  64,  65, 

68. 
Rogers,  T.,  54. 


INDEX 


147 


Rome,  Decline  of,  85,  90. 
Russia,  42,  51,  54,  97,  126. 

Saint-Simon,  6,  7. 

Scientific  Socialism,  2,  3,  5,  23, 

81,  86,  91,  93,  95. 
Seligman,  E.  R.  A.,  92,  137. 
Serfs,  10,  85,  96,  103,  124. 
Shakers,  8. 

Sheffield,  Census  of,  54. 
Sismondi,  61. 

Slavery,  10,  85,  86,  95,  103,  124. 
Social  progress,  29,  42,  58,  64, 

67,   75,    107,   115,    118,    133, 

138. 

Social  utility,  13-23. 
Social  waste,  71,  113. 
Socialist  party,  8,  102,  133, 

135. 

Solidarity  of  working  class,  134. 
South  Sea  Bubble,  72. 
Spahr,  C.  B.,  34,  35,  132. 
Specialization  of  labor,  47,  56. 
Speculation,  73,  78. 


Subsistence,    Minimum   of,    25, 

61,  108. 
Surplus  value,  9,  23,  32-44,  46, 

99,  100,  114,  127. 

Taxation,  85,  86,  90,  115. 
Taylor,  W.  G.  L.,  67,  69,  75,  76. 
Trade  Unions,  51,  53,  102,  111. 
Trusts,  102,  114,  128,  130. 
Tulip  mania,  72. 

Unemployed,  9,  27,  47,  52,  54, 

108,  115. 
Utopian  Socialism,  2,  6,  7,  86, 

138. 

Value,  9,  11,  13-23,  32-44. 
Variable  capital,  46,  50. 

Wages,  24-31,  35,  46,  50,  51, 
58,  64,  99,  107,  109,  110,  112. 
Wealth,  Increase  in,  28,  50. 
Webb,  S.  and  B.,  51,  53,  56. 
Wright,  C.  D.,  28. 


vj^iBR 

ff  OF  THE 

B    UNIVERSITY  ) 

\t  OF  / 

X^UR 


THIS  BOOK  IS  DUE  ON  THE  LAST  DATE 
STAMPED  BELOW 


AN     INITIAL    FINE      OF     25     CENTS 

WILL  BE  ASSESSED  FOR  FAILURE  TO  RETURN 
THIS  BOOK  ON  THE  DATE  DUE.  THE  PENALTY 
WILL  INCREASE  TO  5O  CENTS  ON  THE  FOURTH 
DAY  AND  TO  $1.OO  ON  THE  SEVENTH  DAY 
OVERDUE. 


OCT  12  1932 


1936 


NOV    «  1939 
MAB241941 

SEP   28  1944 

o<ar  e 


DEC  14  861 


•, 
5 


LD  21-50/n-8,-32 


16411-0 


*•* 


